On March 5, 2026, U.S. crude oil prices surged above $79 per barrel following Iran's claim that it struck an oil tanker with a missile, as reported by Iranian state media. The British Navy confirmed a large explosion at a tanker anchored in Iraqi territorial waters, with the ship's master reporting a small vessel fleeing the scene. Despite the explosion, the crew remained safe and no fires were reported [1]. West Texas Intermediate (WTI) oil rose 6.86%, or $5.12, to $79.78 per barrel, while Brent crude increased 4.31%, or $3.51, to $84.91 per barrel at 11:30 a.m. ET. Oil prices have surged more than 17% this week, reflecting heightened geopolitical tensions [1].
Iran's Revolutionary Guard ordered the closure of the Strait of Hormuz earlier in the week and threatened to attack tankers passing through it, according to state media. This has led to a standstill in tanker traffic through the strait, which is a critical route for about 20% of global oil consumption. The ongoing U.S.-Israeli war against Iran has further exacerbated concerns, with ship owners wary of the volatile security situation [1].
In response to the escalating risks, President Donald Trump announced on Tuesday that the U.S. will provide political risk insurance for tankers navigating the strait and stated that the U.S. Navy would escort ships through the Persian Gulf if necessary. However, the Trump administration has not provided a timeline for when the strait will be safe for commercial shipping again. White House press secretary Karoline Leavitt indicated that the timeline is being actively calculated by both the Department of War and the Department of Energy, but declined to commit to a specific timeframe [1].
CONCLUSION
The missile strike claim and explosion have triggered a sharp rise in oil prices, underscoring the market's sensitivity to geopolitical risks in the Middle East. With tanker traffic halted through the Strait of Hormuz and no clear timeline for resolution, energy markets face continued uncertainty and elevated volatility.