world · 2026-07-13
US-Iran Clash Over Hormuz Rattles Oil Trade
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US and Iran both claimed control of Strait of Hormuz Monday after a weekend of strikes across Bahrain, Kuwait, Qatar, Jordan and Oman.The strait carried a fifth of world's traded crude and gas before the war; Iran now threatens to charge or block ships passing through.India, which sources ~40% of its crude via Hormuz-linked routes, faces freight and insurance cost spikes if shipping disruption spreads.
Where exactly did Iran strike this weekend?
Iran struck a container ship off Oman's coast Sunday, then hit Bahrain, Kuwait, Qatar and Jordan, all hosting US forces. The US Central Command hit ~140 targets Sunday and dozens more Monday, including radar and missile sites.
Was the Oman ship attack the war's turning point?
The tanker attack Sunday triggered Monday's escalation: US hit dozens of Iranian air defence and missile sites, and Iran retaliated against US-hosting nations. It marked the sharpest jump in strike intensity in a week.
Who else got hit besides oil tankers?
Iran's Kurdish opposition base in Iraq came under a separate drone attack Monday, with no group claiming responsibility, showing the conflict is spilling beyond the direct US-Iran-Gulf theatre into proxy fronts.
Why did Iran's Guard reject US claims of control?
Iran's Revolutionary Guard controls the country's ballistic missile arsenal and called Hormuz 'our territory'. Its rejection signals Tehran sees the strait as leverage it won't concede even under military pressure.
Could this Hormuz standoff derail the interim
Yes. Iran and the US are only at the midpoint of a 60-day interim deal meant to set up permanent peace talks. Instead, both sides have escalated to direct strikes, with UN chief Guterres warning of a full-scale war returning.
What happens to the interim deal if talks
The interim deal was meant to open talks for a permanent end to the war. If it collapses, Guterres has warned of 'catastrophic consequences', meaning renewed full-scale conflict rather than a negotiated exit.
How have past Hormuz scares affected oil prices?
Hormuz tensions in 2019 and 2012 each pushed Brent crude up 10-20% within weeks on fear alone, even without an actual blockade, since insurers and traders price in disruption risk immediately.
What alternate routes exist if Hormuz truly
Ships can reroute via the UAE's Fujairah pipeline bypassing the strait, or sail around Africa's Cape of Good Hope, but both add days of transit time and raise freight costs sharply for Asian buyers including India.
How would Indian refiners absorb a Hormuz
Indian refiners like Reliance and IOC import a large share of crude through Hormuz. A shutdown forces costlier spot-market buying, higher insurance premiums, and longer alternate routes around Africa, raising landed fuel costs.
Which Indian companies face the biggest cost hit?
Reliance Industries and Indian Oil Corp run large Gulf-crude import books and would see landed costs rise first. Downstream, aviation and transport fuel prices in India would follow within weeks if crude stays elevated.
How does a shipping insurance spike actually work?
War-risk insurance premiums for Hormuz transits can jump several times over within days of an attack, since insurers reprice risk per voyage. This directly raises freight costs passed on to crude buyers like Indian refiners.
Could India tap strategic reserves to buffer this?
India holds strategic petroleum reserves covering about 9-10 days of imports, per govt estimates. That buffers a short shock but would not offset a prolonged closure, forcing reliance on costlier spot purchases instead.
Source: thehindubusinessline.com