U.S. crude oil prices topped $80 a barrel on Thursday as the escalating Iran war disrupts global fuel supplies and traffic in the Strait of Hormuz stalled due to attacks on tankers.
The price of West Texas Middle School Oil rose 8.51%, or $6.35, to close at $81.01 a barrel, its biggest daily gain since May 2020. Global scale Brent Oil prices rose 4.93%, or $4.01, to close at $85.41 a barrel. U.S. oil prices are up about 21% this week.
U.S. retail gasoline prices have risen nearly 27 cents since last week to an average of $3.25 a gallon, according to motorist group AAA. The last time gas prices saw a similar spike was in March 2022, after Russia invaded Ukraine, the group said.
President Donald Trump said Thursday that “further action to reduce oil pressure is imminent.” Trump said on Tuesday that the US would provide political risk insurance and naval escort for tankers.
Iran claimed to have hit an oil tanker with a missile, according to a report by state media. Iran’s Revolutionary Guards ordered the closure of the Strait of Hormuz earlier this week and threatened attacks on tankers passing through, according to state media.
The British Navy reported a large explosion on a tanker anchored in Iraqi territorial waters on Thursday. The ship’s captain reported that he saw a small ship fleeing the scene of the accident. The crew is safe and no fires have been reported.
Tanker traffic through the Strait of Hormuz has ground to a halt since the start of the U.S.-Israeli war against Iran as shipowners worry about the unstable security situation. About 20% of global oil consumption is exported across the Strait.
The Trump administration has no timeline for when the strait will be safe for commercial shipping again, White House press secretary Karoline Leavitt told reporters on Wednesday.
“I don’t want to commit to a timeline, but it’s certainly something that’s being actively calculated by both the War Department and the Energy Department,” Leavitt said when asked during a briefing.