Oil prices skyrocket as Hormuz 'dual blockade' leaves global markets braced for shock

Benchmark Brent crude futures surged early on Tuesday (May 5, 2026), jumping 5.8% to $114.44 a barrel — up $6.27 — as concerns over supply pressures reverberated across global markets as fresh challenges to the US-Iran ceasefire emerged.

Murban, a brenchmark for Gulf crude, also climbed gaining 3.4% to $107.30 by about 7:35 am Tuesday in Tokyo reflecting market sentiment over challenges to the energy channel.

On May 4, 2026, the Iranian regime launched a series of missile and drone attacks on the UAE, including energy infrastructure and a major oil port in Fujairah.

The assault caused fires and was seen as the most serious escalation since a cease-fire earlier in April.

The UAE also reported that Iranian drones targeted an empty ADNOC tanker near the Strait of Hormuz, highlighting how maritime oil traffic is under threat.

The attacks raised fears that oil shipments could be disrupted, prompting traders to unload risk assets and bid up oil prices to account for a geopolitical risk premium — essentially a cost traders price in when supply security is in doubt.

Strategic shipping routes under pressure

The Strait of Hormuz is vital for global energy flows. Because any conflict there could slow, block, or reroute shipments, markets react sharply to military actions or tension near this waterway.

Recent Iranian attacks on ships and threats to oil infrastructure have heightened that risk.

Even before the May 4 attacks, markets were already on edge due to intermittent closures of the strait and previous Iranian strikes on vessels and energy installations — forces that can effectively narrow global supply margins.

US military involvement

In response to the escalation, US forces reportedly destroyed several Iranian small boats in the Strait of Hormuz in fresh engagements as they escorted commercial traffic to keep the waterway open, under "Project Freedom".

This increasingly direct confrontation adds another layer of uncertainty for traders.

Even conflicting reports about Iranian attacks on US warships — which were both claimed by Iranian media and denied by US Central Command — can cause market jitters, pushing prices higher as traders try to price in worst-case outcomes.

Dual blockade

The Hormuz "Dual Blockade" is a 2026 maritime standoff between Iran and a US-led coalition that has crippled global energy trade.

Following military strikes on February 28, Iran restricted passage to "hostile" nations and imposed illegal tolls. In response, the US Navy launched a counter-blockade on April 13 to cut off Iranian oil exports until the strait reopened for all.