[US-IRAN ANALYSIS] Crude jumps as US-Iran strikes continue and Iran declares the Strait shut

• Brent Aug’26 jumps c. 4% amidst the latest bout of US-Iran strikes, and after the Iranian’s announce that the Strait of Hormuz is shut until further notice.

TLDR:

• On Sunday evening, the US conducted large-scale strikes on various regions in Iran. This follows on from President Trump announcing that the ceasefire is “OVER”, though he noted that Iran and the US will continue with talks.
• In response to the strikes, Iran responded with their own attacks on a number of Gulf nations; Jordan, Qatar, Kuwait & Bahrain. Most of these attacks were centred around US military bases in the region.
• Notably, Kuwait’s military stated that a drilling platform owned by the Kuwait Oil Company (KOC) was struck in the drone attack. The local news agency, KNA, reported that “material damage” was caused.
• Moreover, Iran announced that the Strait of Hormuz will be closed until further notice. However, the Joint Maritime Information Centre said the path along the Omani coastline is still available for transit.

Analysis:

• The Kuwait energy infrastructure hit is notable. In this latest bout of strikes in the past few weeks, Iran appeared to avoid energy infrastructure across the Gulf nations, which signalled that the Iranians were holding back, in favour of negotiations. This latest shift in strikes could indicate that the Iranians are ready to escalate the violence, which could see a breakdown in negotiations between the US and Iran.
• The KOC has yet to provide an update on which platform has been impacted, whether operations have been halted or if production has been/will be affected. If there is a material shutter in production, markets will no doubt begin to worry about another supply glut.
• Perhaps the biggest risk is that the Strait of Hormuz remains closed for an extended period of time. It was reported overnight that a Chinse tanker went through the Hormuz via an Iran-designated route – nonetheless, transits through the passage will likely begin to wane.