Hormuz traffic falls to five-week low, Brent holds above $77

Brent crude futures rose $1.67, or 2.2%, to $77.68 a barrel at 0955 GMT on Monday, while US West Texas Intermediate (WTI) added $1.59, or 2.23%, to $73.00. The move follows a weekend of escalating strikes between the United States and Iran, and it feeds straight into the risk premium that UK gas and power benchmarks track.

The driver is the Strait of Hormuz, the chokepoint that carried roughly 20% of the world's daily oil and liquefied natural gas (LNG) supplies before the conflict began in late February. Tehran targeted US facilities in the Gulf on Sunday and again announced it had closed the strait; Iran's Revolutionary Guards claimed on Monday to have hit US military bases in Kuwait and Bahrain. Reuters reported that ship-tracking data showed vessel traffic through the strait fell to a five-week low on Sunday, with only six vessels transiting.

The chart below shows Brent over the last six months, against which today's move above $77 can be read.

What this means for UK buyers

Oil does not set your electricity bill directly, but sustained Brent strength lifts the wider energy complex, and LNG flows through Hormuz matter for the gas that prices UK power. If you are approaching a renewal, a supply-driven risk premium is the wrong moment to lock long on a knee-jerk. It is the right moment to have your numbers ready so you can move if the curve softens.

Watch these through the coming sessions:

• Brent front-month (currently $77.68) and whether it holds above $77
• Inbound tanker counts through Hormuz, the clearest disruption signal
• NBP day-ahead gas, which tracks LNG availability
• UK season-ahead power, sensitive to gas input costs
• The status of the interim US-Iran agreement due to run another 60 days

UBS analyst Giovanni Staunovo said the focus will stay on inbound tanker numbers, as any decrease could affect production, and noted a risk premium and disruption risk are currently supporting prices. The Guardian reported that shipping operators are taking a cautious approach, slowing inbound movements on security concerns.

Context tempers the alarm. Goldman Sachs projected that expanding Middle East pipeline capacity could shield over 60% of pre-war Gulf oil exports from future Hormuz disruption by the end of 2028, with bypass capacity rising 3.8 million barrels per day by the end of 2027. Abu Dhabi National Oil Company set its August Murban selling price at $80.01 a barrel, down sharply from $101.48 the month before, a sign physical premiums remain uneven.

What to watch next: the durability of the interim agreement meant to reopen the strait. President Trump said on Sunday that Hormuz remained open for commercial traffic despite Iran's closure claim. If tanker counts recover, the premium fades; if strikes continue, expect the curve to steepen and gas to follow.