Iran closes Strait of Hormuz
March 3, 2026
Iran’s response on their Gulf neighbors has been a surprise with targeted attacks on energy infrastructure including Qatar’s Ras Laffan LNG production facility which halted operations and Saudi’s Ras Tanura oil refinery.
The headlines have also been active that the Strait of Hormuz is closed. Iran’s IRGC said “the Strait of Hormuz is closed, and Iran is to set any ship trying to pass on fire.”
As the war continues the front months of the energy markets move higher building in more of a risk premium. The first few months of the NYMEX products have been the most active and traded higher as the back of the curve comes along slower. Traders remember that the outlook is still for s surplus of oil and OPEC+ did decide to start producing more oil in April after their meeting over the weekend.
Global oil and gas shipping rates have soared, with the supertankers’ costs in the Middle East hitting all-time highs. Marco Rubio, Secretary of State, stated that the US with the help of Scott Bessent, Secretary of the Treasury and Chris Wright, Secretary of Energy, are actively working on a program to mitigate energy costs to the US consumer. This could imply an SPR release or other measures such as the US treasury proving insurance or guarantees for ships transiting the strait – a step it has taken in the past crisis.
Saudi Aramco is exploring a plan to export oil via the Red Sea to avoid the Strait of Hormuz, as indicators suggest avoidance of the passageway.