Oil prices rose on Thursday after Iran reportedly hit a container ship in the Strait of Hormuz, halting shipping traffic through the crucial waterway.
The price of Brent crude, the global oil benchmark, rose more than 2 percent to around $75 a barrel. West Texas Intermediate crude, the U.S. benchmark, also rose more than 2 percent, to around $72 a barrel.
Prices had fluctuated throughout the day, at one point reaching levels not seen since the start of the war with Iran.
Before the strike, traffic through the strait had increased steadily this week. On Wednesday, 78 vessels transited the waterway, making it “the busiest day since the war began,” according to S&P Global Energy. This represents 57 percent of pre-war daily volume.
The decline in oil prices had accelerated as efforts to clear a backlog of ships stuck in the Persian Gulf moved forward, easing concerns about supply disruptions. Still, Grace Zwemmer of Oxford Economics said in a report on supply chain stress that shipping through the Strait of Hormuz “remains more expensive and risky than before the war due to the potential presence of sea mines and high risk premiums.”
Falling energy prices “will drive freight rates down over time,” Zwemmer said, because fuel is typically the largest operating expense for ships. But not all freight rates will respond in the same way: tanker rates rose the fastest and subsequently moderated significantly, while container ship rates have only begun to rise more recently and may take longer to return to levels close to pre-war prices.
Gasoline prices in the United States, which do not move at the same pace as crude oil and generally lag a few days behind increases or declines, fell slightly on Thursday, to a national average of $3.92 a gallon, according to motor club AAA. Gasoline prices continue to rise more than 30 percent since the start of the war. The average price of diesel fell 2 cents to $4.96 on Thursday, a 32 percent increase since the start of the war.
In stock markets, the US S&P 500 closed the trading day relatively unchanged on Thursday. Strong results from U.S. chipmaker Micron Technology, released after the market closed on Wednesday, appeared to reignite enthusiasm for AI-related companies. The tech-heavy Nasdaq index was down about half a percent at the close.
In Asia, South Korea's KOSPI benchmark gained more than 6 percent, while Japan's Nikkei 225 rose 4.6 percent. Shares in Taiwan rose 0.5 percent. In Europe, the Stoxx 600, a broad index that tracks the region's largest companies, rose almost 1 percent, and the FTSE 100 in Britain rose more than 0.7 percent.
