Hopes of a swift reopening of the Strait of Hormuz fade as Washington’s latest strikes leave UK SMEs counting the cost of another fuel and energy spike
The oil price has lurched higher again after the United States launched a fresh round of air strikes on Iranian missile sites and vessels Washington claims were laying mines in the Gulf, pushing the already-fragile peace process to the brink and dashing hopes of a near-term reopening of the Strait of Hormuz.
Brent crude, the international benchmark, was changing hands 3 per cent higher at around $99.16 a barrel by mid-morning in London, although that still leaves it below Friday’s close of just over $103. The bounce reverses a sharp Monday sell-off that had taken Brent to $97.76, its lowest level in more than a fortnight, as traders piled into the view that a US-Iran rapprochement was finally within touching distance.
Captain Tim Hawkins, a spokesman for US Central Command, insisted the latest action was narrow in scope. The strikes, he said on Monday, were designed to “defend our forces while using restraint during the ongoing ceasefire”. For the energy market, however, restraint is in the eye of the beholder. Iran’s negotiating team had only just touched down in Doha to thrash out an extension of the April ceasefire and a phased reopening of Hormuz when the Tomahawks flew.
A fortnight’s progress unwound in a single shift
For Britain’s small and medium-sized businesses, the timing could scarcely be worse. As Business Matters reported earlier this week, the ceasefire framework agreed in April had been quietly nudging Brent back towards double figures and easing pressure on forecourt prices for the first time since February.
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