Oil prices rose on Tuesday after reports that Iran attacked commercial vessels transiting the Strait of Hormuz, renewing concerns about the security of one of the world’s most important energy shipping lanes and highlighting the fragile state of the interim peace agreement between Washington and Tehran.
International benchmark Brent crude futures for September delivery rose 1.2% to $72.85 a barrel, trimming earlier gains, while U.S. West Texas Intermediate (WTI) crude for August delivery gained 1% to $69.26 a barrel after settling at its lowest level since February 27 in the previous session.
The gains followed an Axios report, citing two unnamed U.S. officials, that Iran fired at least two missiles at commercial ships navigating the Strait of Hormuz on Monday evening. According to the report, the vessels sustained significant damage, although no casualties were reported.
Separately, the United Kingdom Maritime Trade Operations (UKMTO), a British maritime security monitoring agency, said it had received reports of an incident about eight nautical miles east of Limah, Oman. The agency said a tanker travelling southbound was struck by an unidentified projectile, triggering a fire onboard. No injuries were reported.
The reported attack has renewed concerns over the stability of the Strait of Hormuz, a narrow waterway linking the Persian Gulf to global markets. Roughly one-fifth of the world’s seaborne oil supply passes through the strait, making any disruption a significant risk to global energy markets.
The incident comes only weeks after the United States and Iran signed a memorandum of understanding aimed at ending nearly four months of conflict. Although the agreement temporarily eased tensions, indirect negotiations concluded last week without producing meaningful progress toward a permanent peace settlement.
U.S. President Donald Trump on Monday warned that Washington and Tehran would either reach a lasting agreement or the United States would “finish the job,” reviving the possibility of military action against Iran.
Analysts said the latest developments illustrate how quickly geopolitical risks can return to the forefront of energy markets.
“The situation around the Strait of Hormuz remains unsettled. But as we have argued since March, both sides should ultimately have an interest in containing the conflict,” Holger Schmieding, chief economist at Berenberg, wrote in a research note published Friday.
He said President Trump is likely seeking lower oil prices ahead of the November 3 congressional midterm elections, while Iran’s Revolutionary Guards have an incentive to pursue sanctions relief that would strengthen the country’s finances.
Beyond the immediate security concerns, the crisis has sparked broader debate over the future governance of strategic maritime routes. Recent reports indicate that Iran and Oman, which border opposite sides of the Strait of Hormuz, have proposed a framework to the United States that would allow the two countries to jointly administer the waterway and collect administrative fees from vessels using the passage.
Under last month’s memorandum of understanding, commercial shipping is guaranteed safe and unrestricted passage through the Strait of Hormuz for a 60-day period. After that, Iran and Oman are expected to negotiate with other Gulf states on the future administration of the corridor in accordance with international law and the sovereign rights of coastal states.
The proposal has unsettled energy traders and shipping companies because it raises the possibility that similar arrangements could eventually emerge at other critical maritime chokepoints.
One area drawing particular attention is the Strait of Malacca, the narrow waterway between Indonesia, Malaysia, and Singapore that serves as the primary shipping route linking East Asia with the Middle East and Europe.
Janiv Shah, vice president of commodity markets at Rystad Energy, said investors have become increasingly concerned that if Iran succeeds in imposing some form of transit charges in Hormuz, similar ideas could gain traction elsewhere.
“I think part of the reason here is, if we see a potential toll booth with Iran, sort of, enacting upon the Strait of Hormuz, that something similar could be enacted on others, and of course, the most important from a volume metric perspective is … the Strait of Malacca,” Shah told CNBC’s Squawk Box Europe.
He noted that any attempt to implement such a system would likely take considerable time because of the strategic importance and complexity of the route.
According to the U.S. Energy Information Administration, the Strait of Malacca handled 29% of global maritime oil flows during the first half of 2025. Crude oil accounted for just over 70% of shipments through the corridor, with refined petroleum products making up the remainder.
Stretching roughly 900 kilometers, the strait provides the shortest maritime route between East Asia and both the Middle East and Europe, making it one of the world’s busiest commercial waterways.
However, maritime experts have downplayed concerns that tolls could realistically be introduced there. Earlier this year, Indonesia’s Finance Minister Purbaya Yudhi Sadewa suggested imposing charges on ships using the Strait of Malacca before later withdrawing the proposal.
Legal experts note that such a move would violate international law, which guarantees freedom of navigation through straits used for international transit.
The issue was addressed this week when Indonesian President Prabowo Subianto and Singapore Prime Minister Lawrence Wong reaffirmed their commitment to maintaining the free and uninterrupted passage of vessels through the Strait of Malacca following talks in Jakarta.
Hunter Marston, director of the Southeast Asia Program at the Sydney-based Lowy Institute, noted that while the Strait of Malacca is unquestionably one of the world’s most critical maritime choke points, it differs fundamentally from the Strait of Hormuz because of the regional security framework governing it.
He pointed to the Malacca Straits Patrol, a joint maritime security arrangement involving Indonesia, Malaysia, Singapore, and Thailand, as a key factor ensuring the continued openness of the waterway.
“The arrangement benefits all parties as well as the global economy. Without this institution, the Malacca Strait would be just as vulnerable to capricious closure as the Strait of Hormuz,” Marston said in a June 23 analysis.
Analysts at the Washington-based Center for Strategic and International Studies (CSIS) said Iran’s recent actions have demonstrated how control over a major maritime choke point can significantly enhance a country’s geopolitical leverage.
They warned that similar concerns extend to Asia, particularly regarding the Strait of Malacca and the Taiwan Strait, both of which are central to global trade and energy supplies.
“Iran’s efforts to control and toll traffic through the Strait of Hormuz have renewed fears that states could try to do the same to the Malacca Strait. China’s threats to use force against Taiwan have also put the Taiwan Strait at the epicenter of one of the world’s most high-stakes geopolitical hotspots,” CSIS analysts said in a report published July 1.
The think tank added that while alternative shipping routes exist, if either waterway is disrupted, rerouting cargo would increase transportation costs, extend delivery times and add further pressure to global supply chains and energy markets.
