Crude oil prices surged Sunday after the U.S. and Iran each attacked commercial ships in the Strait of Hormuz, pushing the two countries closer to open conflict. The escalation marks a sharp deterioration in an already volatile standoff, with both sides now directly targeting commercial maritime traffic in one of the world's most critical energy chokepoints. Roughly 20% of global oil supply transits the Strait of Hormuz daily, meaning sustained disruption would tighten physical crude supply almost immediately. The attacks introduce a significant risk premium into oil markets, with traders now pricing in the possibility of prolonged shipping disruptions, insurance cost spikes, and potential tanker route diversions around the Persian Gulf. Immediate consequences fall on energy importers in Asia and Europe, who are most exposed to Hormuz-dependent supply chains. The next critical watch points are whether either government signals military escalation, whether commercial shipping suspends Hormuz transits, and how quickly oil-importing nations activate strategic reserves in response.
Qatar's foreign ministry said mediators including Qatar, Pakistan, and Oman have reached "very progressive stages" in efforts to end the US-Iran war, pushing Brent crude down more than four percent.
Qatar confirmed it is mediating between the US and Iran but said no direct talks are currently planned. The clarification follows conflicting statements from President Trump, who claimed talks are under way, and Tehran, which denied any dialogue is happening.
Saudi Aramco reported sharply higher second-quarter 2026 profits as the Iran war restricts global oil supply and pushes crude prices up. Other oil supermajors also posted outsized earnings, raising concerns about sustained fuel cost pressure for importing economies.
President Trump called current Iran negotiations the "last chance" to end five months of conflict, pushing oil prices higher. Tehran denied formal talks are taking place, raising the risk of a diplomatic breakdown with direct consequences for global energy markets.
