DUBAI, October 17 — Oil held above $100 a barrel on Friday as the crisis around the Strait of Hormuz — the maritime chokepoint for roughly a fifth of the world’s seaborne crude — deepened, with attacks on commercial shipping driving up freight and insurance costs and reviving fears of a broader energy shock just weeks before the U.S. midterm elections.
The strait, which links the Persian Gulf to the Gulf of Oman, carries about 20% of global oil supplies and a significant share of liquefied natural gas. Since the regional conflict escalated earlier this year, a string of strikes on tankers and merchant vessels near the waterway has disrupted transit. The International Maritime Organization has said more than 110 vessels have been hit and at least 24 mariners killed since late February, while underwriters have raised war-risk premiums for vessels routing through the Gulf to as much as 6–10% of hull value, up from about 0.25% before the war.
Benchmark Brent crude settled at $109.86 a barrel on Friday, touching $110 for the first time since May, after a series of incidents threatened to choke off flows. Analysts warn that even a partial interruption to Hormuz traffic can ripple through global markets: refiners in Asia and Europe depend on Gulf crude, and longer voyages around alternative routes add weeks to delivery times and inflate freight rates.
The economic fallout extends beyond energy. Central banks already wrestling with sticky inflation now face a fresh supply-side shock, complicating decisions on interest rates. In the United States, gasoline has averaged above $4 a gallon for a record 158 consecutive days and diesel is near $6.30, a political liability for the ruling party ahead of November’s congressional elections.
Shipping executives say some operators are rerouting or delaying voyages, though few alternatives exist given the strait’s centrality. Insurance brokers report that some cargo owners are simply accepting the higher premiums rather than halting trade.
Diplomats and energy officials have stepped up calls for de-escalation, warning that a prolonged closure of the strait would push prices higher still and risk tipping fragile economies into recession. For now, markets are pricing in uncertainty: volatility in oil futures has climbed, and several airlines and manufacturers have flagged energy costs as a near-term risk to margins.
The episode underscores how concentrated global energy infrastructure remains — and how quickly a single chokepoint can transmit geopolitical risk into household budgets thousands of miles away.