Oil Above $118 as Attacks in the Strait of Hormuz Escalate

Brent crude traded at $118.07 a barrel on the morning of 30 October, up 18.7% from $99.47 a month earlier and 82.5% higher than a year ago, according to Fortune’s daily price tracker.

What is driving it

The main driver is the conflict around the Strait of Hormuz. Before the war, the strait carried about 17.1 million barrels of oil a day and roughly 20% of global crude and LNG supplies. Al Jazeera, citing Kpler and UK Maritime Trade Operations data, reported that ten tankers were struck between 28 September and 4 October, and fifteen more attacks were recorded between 6 and 14 October. Daily flows have swung sharply, from nearly 20.8 million barrels on 8 October to 2.9 million on 11 October. The US Navy-led JMIC rates the threat to merchant shipping as “severe”.

The knock-on effects

Higher energy costs are now shaping central-bank decisions in both the United States and the euro area. Disruption on Gulf and Red Sea routes is also pushing more cargo onto alternative corridors, including through Georgia, where Poti’s container volumes rose 7% in January–July.

Why it matters for leaders

Fuel, freight and electricity costs feed directly into margins. Businesses in transport, manufacturing, hospitality and retail should review pricing and hedging assumptions. Logistics companies on the Middle Corridor may find opportunity in the same disruption.

Sources

Photo: Shaah Shahidh / Unsplash