On Thursday, March 12th, due to increased attacks on oil and transportation facilities in the Middle East by Iran, at least seven oil tankers were targeted within a day, leading to a surge in oil prices and continued stock market declines. In response to the rising oil prices, U.S. President Trump stated that preventing Iran from obtaining nuclear weapons is more important than oil prices.
Official sources reported that overnight, three foreign ships in the Persian Gulf were attacked. Prior to this, on Wednesday, three ships were attacked, with one happening to be navigating through the Strait of Hormuz.
According to The Wall Street Journal, a container ship owned by the German company Hapag-Lloyd was attacked near Jebel Ali Port in the UAE, causing a fire but fortunately resulting in no injuries.
Nils Haupt, the communications manager of Hapag-Lloyd, told the Journal, “The Source Blessing vessel was hit by some fragments, resulting in a fire that has since been extinguished, and the crew is safe. Navigation in the Persian Gulf is now very challenging.”
The Source Blessing vessel, leased by Denmark’s A.P. Moller-Maersk, marks the seventh ship to be attacked in the region within the past day, highlighting the escalating attacks. The UK Maritime Trade Operations organization reported that since the end of February when conflicts began in the Persian Gulf, at least 19 commercial ships have been attacked or damaged.
On Thursday morning, the Dow Jones Industrial Average fell by 512 points, a 1.1% drop; the S&P 500 index and the Nasdaq Composite index both declined by 0.8%.
A global sell-off swept through markets on Thursday, with banking and technology stocks generally declining. Financial stocks led the way downward after Morgan Stanley restricted redemptions in private lending funds. Energy stocks like Chevron and Exxon Mobil were among the few that saw gains.
Iran’s new Supreme Leader, Mujtaba Ha’menei, declared that the closure of the Strait of Hormuz should continue as a tool to exert pressure on enemies, further driving up crude oil prices. West Texas Intermediate crude futures surged 6% to around $93 per barrel, while Brent crude futures rose 6% to around $98 per barrel, briefly touching $100 once again.
Brent crude hit $119.50 per barrel on Monday, reaching its highest level since mid-2022.
On Truth Social, Trump posted on Thursday, “The United States is the world’s largest oil producer, far ahead, so when oil prices rise, we can make a lot of money.”
“However, as president, what is more important and meaningful to me is preventing the evil empire of Iran from acquiring nuclear weapons, to prevent it from destroying the Middle East and even the entire world,” he added.
U.S. Energy Secretary Chris Wright told CNBC on Thursday that the U.S. Navy is “not yet ready” to escort tankers through the Strait of Hormuz but suggested that by the end of the month, they may be able to do so.
On Wednesday, the U.S. government announced that Chubb Insurance would act as the primary insurer for a project providing insurance for ships attempting to cross the Strait of Hormuz.
To alleviate pressure on energy costs, Wright announced on Wednesday evening that, authorized by President Trump, the U.S. would release 172 million barrels of oil from the Strategic Petroleum Reserve. The delivery of this oil is expected to take about 120 days.
The International Energy Agency (IEA) stated in its latest monthly oil market report on Thursday that since the U.S. and Israel began airstrikes against Iran on February 28th, the Strait of Hormuz has remained closed, leading to an estimated 8% reduction in global oil supply for March, or around 8 million barrels per day.
The IEA indicated that due to the conflict, Middle Eastern Gulf countries like Iraq, Qatar, Kuwait, the UAE, and Saudi Arabia have cut daily oil production by at least 10 million barrels.
The IEA also agreed on Wednesday to coordinate the release of 400 million barrels of oil to address supply disruptions caused by the war. However, due to concerns that the conflict may be prolonged, oil prices continued to rise in the previous trading day.
The IEA highlighted that Saudi Arabia and the UAE are gradually increasing efforts to use alternative export routes bypassing the Strait of Hormuz, which could help offset some losses and increase global oil supply between April and June.