Oil Tops $100 as Explosions Rock US Base in Iraq and Strikes Hit Iran

Explosions Near Irbil Base and Strikes Across Iran

At least seven explosions detonated near a military base hosting US forces in Irbil, the capital of Iraq’s semi-autonomous Kurdish region, early Friday morning, an Associated Press journalist on the ground confirmed. The blasts came just hours after the US military announced the end of its 13th consecutive night of air strikes against Iran, part of a rapidly escalating campaign to degrade Tehran’s ability to threaten civilian ships and regain command over the Strait of Hormuz.

The strikes, which US Central Command said ended shortly before 5 a.m. local time, targeted a Revolutionary Guard naval base in northern Iran, Qeshm Island—home to drone boat assets used to harass vessels—and sites in Isfahan, Khuzestan, Fars, and Lorestan provinces. Iranian state media reported at least four dead and more than a dozen wounded. Meanwhile, Yemen’s Iran-backed Houthi rebels claimed responsibility for attacking two Saudi oil tankers in the Red Sea, opening a second maritime front at the Bab el-Mandeb chokepoint.

The immediate economic shock was felt in energy markets. Brent crude jumped more than 6% to around $100 a barrel, its highest level since a fragile peace deal was struck two months earlier. Lloyd’s List Intelligence described the dual disruption as a “double whammy,” noting that Saudi Arabia had already been forced to reroute millions of barrels a day of crude exports via an overland pipeline to the Red Sea port of Yanbu as the Persian Gulf became increasingly hazardous for tanker traffic.

Why the Strait of Hormuz and Red Sea Are Now Under Dual Threat

A Coordinated Squeeze on Global Energy Supply

The simultaneous threats to the Strait of Hormuz and the Bab el-Mandeb create a logistical nightmare for oil and LNG shippers. The Strait of Hormuz normally handles one-fifth of the world’s oil and gas trade, while the Bab el-Mandeb, linking the Red Sea to the Gulf of Aden, carries roughly 12% of global trade and a quarter of all container traffic. With both chokepoints under active military pressure, tanker insurance premiums are soaring, and some carriers are already refusing Gulf routings. The resulting supply chain friction is pushing physical crude cargoes to steep premiums, even before the full impact of lost Iranian barrels—estimated at 1.5–2 million barrels per day—is factored in.

Iran’s Fee Proposal and Trump’s Asset Seizure Plan

Compounding the commercial uncertainty, Tehran reiterated its claim of a right to manage strait traffic and charge fees, abandoning the pre-war norm of toll-free passage. President Trump, meanwhile, said the US would seize sanctioned Iranian funds it controls to cover damages to ships caught in the conflict. Legal experts question the mechanism, and Iran’s foreign minister condemned the idea as state-sanctioned confiscation that would erode confidence in the US as a custodian of foreign assets. Even if the plan is never executed, the rhetoric alone raises the risk premium for any company holding dollar-denominated assets or trading in the region.

Who Gains and Who Loses

Other OPEC+ producers with spare capacity, such as Saudi Arabia and the UAE, stand to gain revenue as prices surge, but they also face the immediate security threat themselves. Energy-intensive industries in importing nations—refineries, chemicals, airlines—face margin compression from feedstock and fuel costs. For the average consumer, a sustained $100 oil price quickly translates to higher pump prices and inflation. On the other side of the ledger, tanker operators willing to accept the risk are earning windfall freight rates, while traders with storage capacity may profit from a deepening contango in the futures curve.

What the $100 Oil Spike Means for Shippers, Buyers and Governments

• Shipping companies and charterers: The combined Hormuz–Red Sea closure risk means near-certain cancellations or reroutings of Gulf-origin tankers. Lloyd’s List Intelligence data shows a 25% jump in idled VLCC tonnage as owners pause voyages. Secure alternative supply from Atlantic Basin sources like West Africa or the US Gulf Coast now, even at a premium, to avoid demurrage and force majeure exposure.
• Refineries and energy buyers: Brent’s sudden backwardation-to-contango flip signals physical scarcity. Lock in term contracts with non-Gulf suppliers and accelerate purchases of sour crude stockpiles before differentials widen further. The Government of India, for instance, has already begun filling its Mangaluru strategic reserve.
• Governments and central banks: A $10 increase in crude adds roughly 0.2 percentage points to headline inflation in OECD economies within two quarters. Reassess strategic petroleum reserve release triggers and consumer fuel subsidy caps, as the current spike is unlikely to recede without a concrete ceasefire.
• Investors exposed to energy equities: Upstream producers with assets outside the Persian Gulf—particularly US shale operators—are outperforming integrated majors with heavy downstream exposure. Monitor the Baker Hughes US rig count data due next Friday; a rapid ramp-up would confirm that the price signal is unlocking new supply.