The United States on Monday began a fresh operation to reopen the key waterway. Shipping group Maersk later confirmed that its U.S.-flagged vehicle carrier, Alliance Fairfax, had successfully exited the Gulf through the strait under U.S. military escort, calming immediate concerns over supply disruptions.

Crude oil price on May 5

Brent crude for July delivery slipped 68 cents, or 0.6%, to $113.76 a barrel after rising 5.8% on Monday. U.S. West Texas Intermediate (WTI) crude dropped $1.59, or 1.5%, to $104.83, following a 4.4% gain in the prior session.Tensions, however, remain elevated. Iran launched attacks in the Gulf on Monday in response to the U.S. move, as both sides vie for control of the Strait of Hormuz, a crucial route that typically carries around 20% of global oil and gas supply each day.

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Reports indicated that several commercial ships were hit in the area, while an important oil port in the United Arab Emirates caught fire following an Iranian strike. The U.S. effort to secure the waterway marks the most significant escalation since a ceasefire was declared four weeks ago. In a separate post on Truth Social, he said a South Korean cargo ship had come under fire and suggested that South Korea should consider joining the mission.
In an interview with Fox News, U.S. President Donald Trump warned that Iran would be “blown off the face of the earth” if it attacked U.S. ships protecting commercial traffic.
The U.S. push to reopen Hormuz comes after Iran largely shut the passage following the outbreak of war with the U.S. and Israel on February 28, triggering a major disruption to global energy supplies.
On the outlook, Haitong Futures, as cited by Reuters, noted that the current ceasefire could be temporary. A lack of progress in U.S.-Iran talks by the end of April may lead to renewed escalation, potentially pushing oil prices higher.

Macquarie expects crude to remain supported in the $85 to $90 range in the near term, gradually moving toward $110 as supply conditions improve. However, it cautioned that prolonged disruptions through April could drive Brent as high as $150 per barrel.

Nuvama Institutional Equities echoed a similar view, stating that an extended shutdown of the Strait of Hormuz, which carries around 20 million barrels per day, could lift crude prices into the $110 to $150 range.

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