The first oil tanker attacked in the Strait of Hormuz was the Skylight, a vessel flying the flag of the Republic of Palau, according to Oman’s Maritime Security Centre. The attack occurred around five nautical miles (9.26km) north of Khasab Port on Sunday morning, marking a significant escalation in regional tensions.

Attack Details and Crew Evacuation

Oman’s Maritime Security Centre confirmed the attack in a statement shared on X, noting that the vessel had 20 crew members on board, including 15 Indian nationals and 5 Iranian nationals. All were evacuated, and preliminary reports indicate that at least four individuals were injured and have been transferred for medical treatment.

The incident follows a declaration from Iran’s Islamic Major Guard Corps (IRGC) that the Strait of Hormuz is closed to international navigation. This statement was made on Saturday, following recent US and Israeli strikes on Iran that killed Supreme Leader Ayatollah Ali Khamenei and prompted Iranian missile retaliation.

Oman authorities also stated that the port of Duqm was targeted by a drone attack, adding to the growing security concerns in the region. Oman has historically acted as a mediator between Iran and the United States in nuclear talks, making the current situation particularly complex.

Strait of Hormuz Closure and Shipping Disruptions

Following the IRGC’s warnings, the Strait of Hormuz has effectively been closed to international navigation, with no ships allowed to pass. Although Tehran has not officially announced a full blockade, the threat has triggered immediate disruptions to shipping traffic.

Ship traffic has plummeted, with many vessels either holding outside the Gulf of Oman or executing U-turns mid-transit. Most major shipowners and operators have suspended operations through the Strait of Hormuz, and marine insurers have halted coverage for any voyages in the area, leaving transporters exposed to massive risk premiums or outright refusal.

Notable examples include the very large crude carrier KHK Empress, partially loaded with Omani crude, and the Desh Abhimaan, which sails under the flag of India. Both vessels turned back, highlighting the severity of the situation.

According to analysts, the global oil market is bracing for significant volatility. Oil futures are expected to rise, with Brent crude potentially hitting $100 per barrel, a level last seen after Russia’s invasion of Ukraine in 2022.

Global Oil Market and OPEC+ Response

Analysts at Barclays and other firms have raised their forecasts to that threshold, warning that a prolonged halt could block up to 20 million barrels per day, which represents about 20% of global supply.

The eight OPEC+ countries—Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman—met virtually on Sunday to review global market conditions and outlook. In a press release, they announced a small increase of oil output by 206,000 barrels per day starting in April.

The statement also informed that the eight OPEC+ countries will “hold monthly meetings to review market conditions, conformity and compensation,” with the next conference scheduled for 5 April. This move is aimed at stabilizing the market amid the current uncertainty.

No kinetic Iranian naval blockade has materialized yet, but the practical shutdown and insurance void have created extreme volatility. Ship tracking monitors show the large majority of traffic stalled on either side of the Strait of Hormuz, and any further escalation or de-escalation will dictate the market reaction.

As the situation continues to unfold, the international community watches closely, with the potential for further disruptions to global oil trade and economic stability.