2026.05.08

Oil Jumps as US-Iran Hostilities Flare Up Again

Oil prices rebounded sharply after renewed military clashes between the U.S. and Iran raised fears of further disruption in the Strait of Hormuz. U.S. WTI crude surged as much as 3% in early Friday trading before holding a 2.58% gain at $97.26 per barrel, recovering from the previous session’s close of $94.81. The U.S. military said it launched retaliatory strikes against Iranian targets linked to attacks on American forces, while Iran accused Washington of violating the ceasefire by attacking two ships in Hormuz and striking civilian areas.

US Launches Retaliatory Strikes on Iranian Targets

The U.S. struck Iranian military targets after Iran launched missiles, drones, and fast boats at three American destroyers transiting the Strait of Hormuz, according to U.S. Central Command. Donald Trump said no U.S. assets were hit and warned Iran would face “much harder and more violent” attacks if it refuses to quickly accept a proposed agreement. Despite the clash, both sides are still discussing a possible deal that could reopen Hormuz and ease the ongoing energy crisis, with Iran expected to respond through Pakistani mediators within days.

First Chinese-Linked Tanker Reportedly Hit by Iran Near Hormuz

A Chinese-linked product tanker became the first Chinese-owned vessel reportedly attacked by Iran during the US-Iran conflict, after a deck fire broke out near Mina Saqr at the western entrance of the Strait of Hormuz on May 4. The vessel is believed to be the 45,000-dwt JV Innovation (built 2004), which was signaling “China owner and crew” on AIS at the time of the incident. No crew injuries were confirmed, though a source linked to the owner described the attack as “psychologically very hard to accept.”

US Sanctions Iraqi Oil Official and Iran-Linked Militia Leaders

The U.S. imposed sanctions on Iraq’s deputy oil minister Ali Maarij Al-Bahadly and three Iran-linked militia leaders, accusing them of exploiting Iraq’s oil sector to support Tehran-backed militant groups. The Treasury Department said the network helped divert Iraqi oil products to benefit Asa’ib Ahl Al-Haq and previously sanctioned oil smuggler Salim Ahmed Said. Scott Bessent warned the U.S. would continue targeting companies and banks involved in illicit Iranian oil trade, including firms connected to Chinese refiners.

Loading Delays at Oman’s Mina Al Fahal Add Pressure to Global Oil Flows

Loading delays at Mina Al Fahal, a key Omani export terminal outside the Strait of Hormuz, are disrupting crude shipments and threatening late deliveries to buyers already facing tight Middle Eastern supply. Traders said overlapping schedules and tight loading windows may prevent some VLCCs from fully loading before month-end, with April cargoes already pushed into May. The disruptions come as the Iran war continues to choke regional oil flows, making alternative export routes increasingly critical. TotalEnergies SE reportedly purchased 44 cargoes of Omani crude in March, further increasing pressure on the terminal’s loading capacity.

UAE Quietly Moves Oil Through Hormuz

The UAE has secretly resumed limited crude exports through the Strait of Hormuz by sending tankers with AIS trackers turned off to avoid Iranian attacks. ADNOC reportedly exported at least 6 million barrels in April, including 4 million barrels of Upper Zakum crude and 2 million barrels of Das crude. One cargo reportedly sold to a Northeast Asian refinery at a record premium of $20 per barrel above ADNOC’s official selling price, highlighting severe supply tightness. Since the conflict began, ADNOC’s exports have fallen by more than 1 million bpd from last year’s 3.1 million bpd average, while Gulf producers including Iraq and Kuwait have sharply reduced or halted exports altogether.

Japan and UAE Discuss Expanding Oil Supplies and Joint Stockpiles

Japan and the UAE agreed to deepen energy cooperation amid Middle East supply disruptions, including discussions on expanding joint crude stockpiles in Japan and increasing UAE oil supplies. During talks on May 5, Japan proposed boosting strategic reserves and strengthening alternative export routes, while reports suggested Tokyo may seek an additional 20 million barrels of UAE crude, though officials said details remain under discussion. Japan also reaffirmed cooperation with Saudi Arabia on energy resilience as concerns over Hormuz disruptions continue. At the same time, Tokyo said it recently procured Russian Sakhalin-2 crude due to the Middle East crisis.

Aframax Secondhand Prices Hit Record High as Hormuz Crisis Fuels Tanker Rally

Secondhand aframax tanker values surged to record levels after Singapore’s Pusaka Laut reportedly sold the 108,500-dwt Pusaka Borneo (built 2018) for $76.5m, described by Veson Nautical as the most expensive aframax ever sold on a like-for-like basis. The deal highlights how eight-year-old aframax prices have climbed to parity with newbuilding values amid freight markets disrupted by the effective closure of the Strait of Hormuz. Only 25 aframax S&P deals have been recorded this year versus 62 last year, as owners hold onto vessels while spot earnings remain elevated, with Clarksons assessing non-eco aframax rates at $92,300 per day. The rally has also spread to VLCCs, where five-year-old ships are now valued at $138m compared to $129m for newbuildings, reflecting intense demand and tightening tanker availability.