Iran Says Two Tankers Exploded In Hormuz Chokepoint As Ship Traffic Near Standstill

Visible maritime traffic through the Hormuz chokepoint remained subdued into the new week after Iranian forces allgedly targeted tankers attempting to transit the narrow waterway, including routes close to Oman. This comes as the US and Iran have been locked in a dangerous tit-for-tat escalation that has entered its ninth day.

UK maritime authorities reported an unverified vessel fire near Oman late Sunday. Reuters reports that Iran's Revolutionary Guards claimed two crude oil tankers exploded and were immobilized while using what Tehran called an unsafe southern route in the Hormuz.

Bloomberg ship-tracking data shows that vessels crossing the Hormuz chokepoint have come to a near standstill as Gulf escalation has surged for the ninth day, with Iran targeting not just the maritime chokepoint but also US military assets at Jordan's Aqaba airport with ballistic missiles, as well as US assets at Kuwait's Al-Adiri camp and Ali Al Salem Air Base, and in Syria. Iran also hit civilian infrastructure, notably power generation and water desalination plants in Kuwait.

There is a power struggle for control over the critical strait. The US launched a series of airstrikes along the waterway to degrade Iran's offensive capabilities.

US Central Command said overnight that it had begun "a new wave of strikes" aimed at "degrading" Iran's ability to attack ships in the strait.

US Secretary of State Marco Rubio was quoted overnight by the outlet as saying that US forces would continue targeting Iran while it attacks global shipping lanes in the strait.

"The Strait of Hormuz are international waterways, and they continue to launch against the ships in that international waterway," Rubio said.

He continued, "As long as Iran insists on controlling an international waterway, we're gonna have to respond to that. The United States always remains open to a diplomatic solution."

In markets, Brent crude futures are flat this morning around 06:30 ET. Brent trades around $88 a barrel, while WTI futures are around $82.

Brent briefly traded above the $90 handle for the first time since early June in the overnight hours but has since reversed the move.

"A near-term escalation in the Mideast now appears to be the key left tail risk which could tip the index lower. Broader infrastructure strikes or a Houthi-led Red Sea disruption likely sees Brent over $100 again," UBS analyst Justinus Steinhorst noted, adding, "The desk's preferred hedges are long Mideast Resilient {UBXEMERR} and E&Ps {UBXEXPO}."