Crude futures surge after IRGC projectile attack on Ever Lovely container ship
CL•Iran’s IRGC fired on the Singapore-flagged Ever Lovely in the Strait of Hormuz, damaging its bridge but causing no casualties or environmental harm. The strike reversed a recent crude oil price decline, prompting traders to inject a fresh geopolitical risk premium into futures.
1. Attack Details and Vessel Impact
Iran’s Islamic Revolutionary Guard Corps targeted the Ever Lovely, a Singapore-flagged container ship, with a projectile in the Strait of Hormuz. The strike damaged the vessel’s bridge but resulted in no injuries or environmental damage, and the ship was navigating near Omani waters at the time.
2. Immediate Market Reaction
Crude oil futures, which had been on a downward trend following the peace agreement, jumped sharply as traders scrambled to factor in renewed geopolitical risk. The sudden repricing added a significant premium to benchmarks as supply disruption fears resurfaced.
3. Peace Deal Context
The attack occurred just days after the U.S. lifted key sanctions on Iranian oil and agreed to security guarantees for commercial vessels under a 60-day truce. Market optimism tied to the reopening of the strategic shipping lane was shattered by the IRGC’s unexpected aggression.
4. Broader Geopolitical Implications
The incident underscores persistent volatility in the Strait of Hormuz, which handles around 20% of global oil trade. Heightened security concerns could drive up insurance costs and prompt rerouting, further straining global oil supply chains.
