Oil prices surge on Strait of Hormuz blockade… Gold prices rise

International oil prices surged after Iran was attacked by the United States and Israel. That was because the Islamic Revolutionary Guard Corps (IRGC) blocked the Strait of Hormuz, through which roughly a quarter of global seaborne crude cargo volumes pass. Even before the airstrikes, escalating war jitters between the U.S. and Iran had already lifted international oil prices into the $70-a-barrel range (Brent basis), and there are now concerns prices could break above $100 depending on how the conflict evolves.

As of 6:21 p.m. (local time) on the 1st at the New York Mercantile Exchange, April-delivery West Texas Intermediate (WTI) was trading at $71.89 a barrel, up $4.87 (7.27%) from the previous session.

Brent crude was also up $5.42 (7.44%) at $78.29. It briefly jumped to as high as 82.37 intraday, marking the highest level since the January 2024 peak (82.63). It is said to have risen more than 9%, posting the biggest gain in four years.

The IRGC halted ship traffic through the Strait of Hormuz at the entrance to the Gulf waters (Persian Gulf) on the 28th of last month, the same day it was attacked. The strait is a key energy chokepoint accounting for 20–30% of the world’s seaborne crude shipments.

According to a report by CNBC, Matt Smith, an analyst at energy analytics firm Kpler, said, "Tankers have started to gather near the Strait of Hormuz, but for now it seems no ship can get through." UBS, a global investment bank (IB), said, "The pace at which traffic through the Strait of Hormuz is restored and the scale of Iran’s retaliation will be key factors in determining oil prices over the coming days."

Concerns are rising that the oil price rally could extend if disruptions to navigation through the Strait of Hormuz persist. Earlier, JPMorgan projected that if the strait is fully blocked, international oil prices could climb above $120–$130 a barrel.

Gold futures are also firm as demand for safe-haven assets strengthens. According to Investing.com, April-delivery gold futures on COMEX, part of CME Group, were trading at $5,342.90 per ounce, up $95 (1.81%).

Meanwhile, as the likelihood of disruptions to crude distribution increased, Middle Eastern oil producers decided on a larger-than-expected production increase. Eight core countries (V8) of OPEC Plus (+) said in a statement that they agreed to add an additional 206,000 barrels a day from April. The increase far exceeds the market expectation (137,000 barrels a day).

Oh Jeong-min, Hankyung.com reporter blooming@hankyung.com