A conflict involving the United States, Israel, and Iran has entered its eighth month as drone and missile attacks against oil vessels in the Strait of Hormuz reach reported record levels. Despite initial projections by President Donald Trump and Israeli Prime Minister Benjamin Netanyahu for a two-week incursion following a February 28 announcement, negotiations remain deadlocked and energy markets continue to face high prices. Analysts report that the waterway, which carries 20% of the world’s oil and seaborne gas, is currently experiencing its most volatile period of the war.
The conflict began in late February, at which time the price of Brent Crude oil rose from an average of $65–$70 per barrel to over $100. Although an interim peace agreement in July briefly lowered prices, the market has sustained rates above $100 for most of the last quarter. To address domestic fuel costs ahead of the U.S. midterm elections, President Trump recently lifted sanctions on Russia to permit the export of diesel into the global market.
Data from the Financial Times indicates that 24 ships were struck in the two weeks leading up to October 11, nearly doubling the 13 attacks recorded during the first two weeks of the conflict in March. Shipping volume through the strait has fluctuated significantly; while flows reached 15.5 million barrels per day last month, they dropped to 2.9 million barrels on October 11. The Institute for the Study of War reported that Iran may be expanding its missile capabilities to target vessels, while other analysts noted the increased use of mines and small reconnaissance boats.
The instability also impacts food security for populations in parts of Africa and Asia. International Fund for Agricultural Development President Alvaro Lario told Reuters that a failure to reach a UN-backed agreement to move fertilizer through the Strait of Hormuz is creating a supply crisis. Households may notice these effects through rising food prices, as the lack of fertilizer shipments coincides with disruptions to Black Sea wheat supplies and weather patterns from El Niño. If the blockade or attacks persist, the pass-through costs of shipping and fuel are expected to place further pressure on the global cost of living.
For individual households and businesses, the "new normal" of $100-per-barrel oil maintains high prices for gasoline, heating, and medicine. Dr. Neil Quilliam of Chatham House noted that while markets have absorbed some unpredictability, the physical threat to Saudi energy infrastructure remains a significant risk to global supply. Currently, there is no set date for a resumption of peace talks, and the U.S. midterm elections remain a focal point for domestic policy shifts regarding energy sanctions. The UN-backed fertilizer plan remains unconfirmed as of October 14, and shipping risks continue to be assessed on a daily basis by maritime monitors.