Brent moves higher as Iran asserts total control of Hormuz

The front-month ICE Brent contract has gained by $2.68/bbl on the day, to trade at $99.24/bbl at 09.00 GMT.

IMAGE: Oil pumpjacks. Getty Images

Upward pressure:

Brent crude is trading close to triple-digit territory after Iran said it would have complete control over the Strait of Hormuz, Bloomberg reported.

Tehran is preparing a final agreement with Oman to establish a new shipping corridor through the strait and retain complete control over it.

“The recent escalation of the Middle East conflict has increased the likelihood of a prolonged standoff, punctuated by calibrated military action by the US and Iran,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Meanwhile, Washington has rejected Tehran's assertion of authority over the Strait of Hormuz, maintaining that the vital waterway remains a transit corridor under international law.

The latest escalation “could see Persian Gulf supply remain constrained through the rest of 2026. We don’t expect a full return to pre-war throughput until late Q1 [first quarter] or early Q2 [second quarter of] 2027,” Hynes added.

Downward pressure:

While there is no major downward pressure on Brent’s price today, market analysts will continue to monitor volumes of oil flowing through the Strait of Hormuz.

Last week, US secretary of energy Chris Wright said 17 million bbls of crude passed through the waterway on 31 August, the highest in recent months, Reuters reported.

“If Strait of Hormuz flows continue uninterrupted despite the latest escalation, the upward pressure on prices may begin to fade,” two analysts from ING Bank noted.

By Aparupa Mazumder

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