Brent holds above $93 as Iran closes Strait of Hormuz to tankers

Brent futures traded at $93.18 a barrel by 07 GMT, up 0.09%, with US West Texas Intermediate (WTI) at $90.28, up 0.28%. Both contracts had climbed more than $2 earlier in the session before traders concluded that, so far, no actual disruption to oil transport in the region has materialised. The Financial Times reported that the moderation reflected traders weighing the gap between Tehran's declarations and observed tanker movements.

The trigger was Iran's announcement that the Strait of Hormuz is closed to oil tankers and commercial ships, with its military command stating that any vessel attempting to pass would be fired upon. US forces began further strikes on multiple Iranian targets at 21 GMT, which Bloomberg reported has added to supply risk after a fragile ceasefire reached in early April. ING analysts noted the escalation signals a deal remains distant and that energy shipments from the Persian Gulf are likely to stay severely restricted. The US military, however, said commercial vessels continued to move in and out of the Strait on Wednesday, and confirmed no US warships had been hit despite Iranian media claims.

What this means for UK energy buyers

Brent above $90 feeds directly into UK wholesale gas and power pricing through oil-indexed LNG contracts and substitution effects. If you are on a fixed contract, you are insulated until renewal; if your renewal window opens before the autumn, the forward curve is now pricing in sustained Gulf supply risk. Flex buyers face a market that moves on headlines rather than physical flows, which argues for tranche discipline rather than reactive purchasing.

The chart below shows Brent over recent months, against which the move above $90 and the forward curve's Gulf risk premium can be read.

Key figures to watch:

• Brent front-month (currently $93.18/bbl)
• WTI front-month (currently $90.28/bbl)
• US crude inventories (down 7.2 million barrels to 426.5 million in the week to 5 June, per the EIA)
• OPEC output (May fell to its lowest in over 20 years, per a Reuters survey)
• Tanker traffic through the Strait of Hormuz

The supply picture is tighter than the muted price move suggests. US crude stockpiles, including strategic reserves, have fallen 79 million barrels since the conflict began on 28 February. S&P Global noted the strikes have heightened Middle East supply risk, while Reuters reported that Indian refiners have secured sufficient crude through at least August, and that Abu Dhabi National Oil Co (ADNOC) and other Gulf sellers are still managing some exports to Asia.

Watch whether physical disruption follows the rhetoric. President Trump said the strikes would cease soon but warned of escalation if Iran's leadership does not agree a deal quickly; the first confirmed tanker incident in the Strait would reprice Brent, and UK forward energy curves, sharply.