At 5:40 AM Central European Time this Monday, oil prices jumped 1.2 percent. The reason: the United States struck Iran's Larak island in the Strait of Hormuz overnight — and Tehran fired back.
This sounds like another headline from a war that's now been running for six months. But for you, it means real money: higher gas prices, more expensive groceries, pricier plastics — everything connected to oil gets more expensive.
The Story Behind It
The Strait of Hormuz is a narrow waterway between Iran and Oman, less than 40 kilometers wide at its narrowest point. Through it flows 20 percent of the world's oil and a large portion of liquefied natural gas from the Middle East.
Since February 2026, the US and Iran have been fighting a war centered mainly on this exact waterway. Both sides attack tankers, both sides periodically block traffic. Last weekend, only five cargo ships passed through the strait — before the war, it was 31 over the weekend.
This morning, the US shelled Iran's Larak island, a strategic military base. Iran fired back. The result: Oil is now at $89 per barrel (Brent Crude) — 23 percent higher than before the war in February, when it was at $72.
What This Means for You
When oil gets more expensive, almost everything gets more expensive. Gas prices in the US have exceeded $4 per gallon — the highest level since 2022. In Germany, fuel prices have risen over 15 percent since February.
But it's not just about filling your car. Oil is in plastics, in fertilizer, in transport. When truck diesel gets more expensive, food gets more expensive. When jet fuel gets more expensive, flight tickets get more expensive. The bill ultimately lands with you — whether you own a stock or not.
Experts predicted six months ago that oil prices would shoot above $120 in a war over the Strait of Hormuz. That we're "only" at $89 is because the world has managed to find alternative supply routes — from the US, from Canada, from Norway. But the cushion is thin.
How Professionals Are Reacting
Oil futures are the bets professionals use to wager on rising or falling oil prices. Since the escalation over the weekend, bets on further rising prices have surged. The market expects the war won't end quickly.
Energy stocks like ExxonMobil, Shell, and BP have risen 15 to 25 percent since February — not because these companies are producing more oil, but because the oil they sell is worth more.
On the other hand, airlines are suffering: Lufthansa, Delta, Ryanair have lost up to 12 percent since February because jet fuel is their biggest cost item.
First Steps for Beginners
If you're hearing about the Strait of Hormuz for the first time: You should know that the global economy is extremely dependent on a few narrow waterways. The three most important are:
- Strait of Hormuz (Persian Gulf ↔ Indian Ocean) — 20% of global oil
- Suez Canal (Mediterranean ↔ Red Sea) — 12% of global trade
- Strait of Malacca (Indian Ocean ↔ Pacific) — 25% of global maritime trade
If even one of these is blocked for longer than a few weeks, prices rise worldwide. And that's exactly what's happening right now with the Strait of Hormuz.
Anyone wanting to invest in energy stocks should know: Oil stocks rise when oil becomes scarce — but that's a bet on war and scarcity, not on a healthy business. Many investors therefore prefer broadly diversified ETFs that contain energy only as a small part — not as the main bet.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Past performance is not an indicator of future results.