The Strait of Hormuz, the world’s most sensitive oil-transportation choke point, remains in focus, after U.S. and Iranian officials on Thursday said Iran shot down a U.S. military drone near the waterway.
“This event is raising fears Iran and the U.S. are headed toward a military confrontation that would have serious price consequences for energy. There is too much dangerous activity going on in the Strait of Hormuz,” said Phil Flynn, senior market analyst at Price Futures Group, in a note.
It is the latest in a string of incidents near the waterway that have contributed to rising fears of a U.S.-Iran military conflict that could disrupt the flow of crude oil from the Middle East. It comes less than a week after a pair of oil tankers were attacked near the coast of Iran which the U.S. blamed on Tehran.