Strait of Hormuz threat level hits 'severe' after Iran attacks 3 tankers

Iran's attacks on three tankers using a U.S.-protected route near Oman pushed the Strait of Hormuz threat level to "severe" for the first time since April.

The Joint Maritime Information Center raised the Strait of Hormuz threat level to "severe" Monday after Iran struck three tankers using a U.S. Navy-protected route near Oman's coast, the most attacks in a single day since late April.

"This is a serious and explicit violation of international law," Majed Al-Ansari, a spokesperson for the Qatari Foreign Ministry, said, adding that Qatar holds Iran "fully legally responsible" for the attack on its liquefied natural gas tanker Al Rekayyat.

One tanker was hit on its left side as it exited the strait near the Omani-Emirati border, while a third was struck by a drone off Oman, the UK Maritime Trade Operations center said. The attacks follow Iran's warning last Thursday that all oil tankers must use its approved routes or face consequences. The Joint Maritime Information Center, a multinational body overseen by the U.S. Navy, had told shippers Monday that the alternative route around Oman "has been expanded and remains available for all traffic."

The Strait of Hormuz handles about 21% of global oil trade, making any disruption a direct threat to energy prices and global inflation. Brent crude is expected to spike more than 3% on the escalation, with safe-haven assets including gold and the U.S. dollar likely to gain as risk-off sentiment sweeps markets. The VIX, Wall Street's fear gauge, is poised to rise as investors rotate out of equities and into defensive positions.

Iran's Escalation Strategy

Tehran's decision to target vessels using the U.S.-protected route marks a significant escalation from previous attacks, which were concentrated on ships using Iran's designated corridor. Iran's joint military command warned last week that interference by U.S. forces in the strait "will be met with a rapid and decisive reaction." The last time Iran struck multiple vessels in a single day was in late April, when two tankers were hit within hours of each other, sending Brent above $90 a barrel.

The attacks come as Iran mourns Supreme Leader Ayatollah Ali Khamenei, who was killed at the beginning of the war. Hundreds of thousands gathered Tuesday in Qom for his funeral, with his body set to be buried Thursday at the Imam Reza shrine in Mashhad. His son, Ayatollah Mojtaba Khamenei, has yet to appear publicly and is believed to be in hiding after reportedly being wounded in the airstrike that killed his father.

Market Fallout and Forward Outlook

The escalation threatens to choke off traffic through the waterway just as global economies hoped to restore normal shipping practices. In peacetime, a fifth of all traded oil and natural gas passed through the channel. Data firm Kpler reported that at least 108 ships crossed the strait using various routes over the past weekend, underscoring the volume at risk.

President Donald Trump warned Iran Monday that it would need to "make a deal, or we're going to finish the job," adding that the U.S. "can knock down their bridges in one hour" and "knock out their energy supply." Talks between the U.S. and Iran over reopening the strait and rolling back Tehran's nuclear program appeared on hold until after Khamenei's burial.

The last time the threat level was raised to "severe" in April, Brent crude surged 5.2% in two sessions while gold gained 2.8% as investors fled to safety. A prolonged disruption could add to inflationary pressures globally, complicating central bank rate paths just as the Fed and European Central Bank weigh further easing.

This article is for informational purposes only and does not constitute investment advice.