By: Isuru Parakrama
August 01, World (LNW): Global oil prices moved higher on Friday (31) as renewed tensions around the Strait of Hormuz fuelled concerns over potential disruptions to international energy supplies, adding further uncertainty to an already volatile market, international media reported.
Brent crude rose by more than one per cent during trading, with market sentiment driven by reports from Iran claiming its forces had prevented two vessels from leaving the strategic waterway. Iranian officials also stated that four additional tankers had turned back following military intervention, although these claims have not been independently verified.
Despite the reported restrictions, shipping data indicated that several large crude carriers and commodity vessels continued to transit the Strait of Hormuz, one of the world’s most critical maritime trade routes through which around one-fifth of global oil shipments normally pass.
The latest developments come amid heightened regional instability following a drone attack that damaged two vessels at Egypt’s Mediterranean port of Damietta earlier this week. While no group has claimed responsibility for the incident, Iran has denied any involvement.
The Strait of Hormuz has remained at the centre of regional tensions since the conflict involving Iran escalated several months ago. At the same time, Iran-backed Houthi forces in Yemen have expanded threats against shipping in the Bab el-Mandeb Strait, another strategically important corridor linking the Red Sea to the Gulf of Aden and a vital route for international trade.
Analysts warned that prolonged disruption to either shipping lane could have significant consequences for global energy markets, potentially increasing transport costs and placing further upward pressure on oil prices. According to market observers, Brent crude has recorded strong gains throughout July, with many economists expecting prices to remain elevated if geopolitical tensions persist.
Meanwhile, there were no reports of additional US military strikes against Iran overnight after a sharp escalation earlier in the week, including joint operations by US and Saudi forces targeting Iranian-backed groups in Iraq.
US President Donald Trump said he still believed a negotiated settlement with Tehran remained possible, revealing that senior administration officials were continuing diplomatic efforts. However, he also expressed growing scepticism about Iran’s willingness to honour any agreement, signalling that military options remained under consideration should tensions continue to escalate.
Iranian authorities maintained that navigation through the Strait of Hormuz remained heavily restricted due to what they described as continued US military activity in the region. Officials indicated that transit requests would only be reviewed once security conditions improve, although some commercial vessels have reportedly secured passage through separate arrangements.
Elsewhere, Iran’s military announced that it had launched attacks targeting US military facilities in Kuwait and Bahrain in retaliation for recent American operations. Kuwait confirmed that its air defences intercepted several drones, with no casualties reported, while Bahrain had not issued an official response at the time of reporting.
Against the backdrop of increasing security risks, Saudi Arabia has proposed the creation of a multinational maritime defence coalition aimed at safeguarding commercial shipping and protecting energy supply routes across the Red Sea and neighbouring waterways.
Shipping intelligence has also shown that a growing volume of Saudi oil exports is being redirected through alternative routes, including the Suez Canal and the SUMED pipeline, in an effort to minimise risks. However, cargoes destined for Asian markets continue to face longer and more costly journeys as vessels avoid conflict-affected areas.
Diplomatic efforts to ease tensions remain ongoing. Oman has continued discussions with Tehran over proposals for managing navigation through the Strait of Hormuz, although Iranian officials have publicly rejected aspects of the initiative while confirming that negotiations between the two sides are continuing.