Iran strikes back: the Strait of Hormuz is disputed-closed again — what it means for oil and the FTSE 100

The Iran conflict entered another acute phase over the weekend. The US launched fresh airstrikes on Iranian military targets on 12–13 July 2026, following the breakdown of the ceasefire on 8 July. In response, Tehran claimed it had closed the Strait of Hormuz — the world’s most critical oil shipping chokepoint. President Trump rejected the claim, insisting the route remains open to commercial traffic (Sharecast, 13 July 2026).

The conflicting statements are themselves the story. Markets don’t need confirmed closure to price in closure risk — the ambiguity alone is enough to push oil higher and split the FTSE 100 sharply between winners and losers. Here’s what the dispute means for UK investors today.

What happened over the weekend?

Following the collapse of the US-Iran ceasefire on 8 July 2026, the US military launched fresh airstrikes targeting Iranian military facilities across several Gulf states during the weekend of 12–13 July. The strikes were described by the Pentagon as “targeted and proportionate” responses to renewed Iranian attacks on US assets in the region.

Iran’s response was to announce the closure of the Strait of Hormuz to commercial shipping — the same measure that had caused the original oil price surge to $116.29/bbl in March 2026. President Trump rejected the Iranian claim, posting on Truth Social that US Navy assets were “escorting commercial vessels safely through the Strait” and that the waterway remained open (Sharecast, 13 July 2026).

The conflict is now in its most dangerous phase since the original Hormuz closure in March. Unlike previous ceasefire cycles, there is currently no active diplomatic track to resolve the standoff — a structural difference that markets are beginning to price.

Is the Strait of Hormuz actually closed?

This is the key question — and the honest answer is: disputed. Iran has claimed closure; the US has denied it. Shipping data and insurance market signals provide the most reliable real-time read:

• Tanker tracking: as of the morning of 13 July 2026, shipping data showed reduced but not zero traffic through the Strait, with several vessels appearing to hold position outside the chokepoint rather than transit
• War risk premiums: Lloyd’s of London war-risk insurance premiums for Gulf tanker voyages have risen sharply since the weekend, suggesting insurers are pricing a material closure risk even without confirmed physical blockade
• US Navy presence: the USS Gerald R. Ford carrier group is operating in the Arabian Sea. US escorts of commercial vessels, if confirmed, would signal the waterway is being kept open by force rather than by Iranian acquiescence

The practical effect for markets is that the distinction between “closed” and “disputed-open” is less important than it might seem. When tanker operators cannot get insurance at viable rates, they do not transit regardless of official statements. The “disputed” state is functionally equivalent to a partial closure for oil supply purposes.

The Strait of Hormuz carries approximately 20% of global seaborne oil. When Iran physically blocked the waterway in March 2026, the IEA described it as the “largest supply disruption in the history of the global oil market.” A disputed or partial closure creates similar supply-risk pricing even without physical blockade. (IEA, 2026)

How is the FTSE 100 reacting?

The FTSE 100 opened lower on 13 July 2026 and remained in the red through the morning session, but the index-level move masks a sharp divergence between sectors (Trading Economics, 13 July 2026):

• Energy: Shell +1.4%, BP +2.5% — higher oil prices directly boost integrated energy major revenues and reflect the market’s view that sustained conflict benefits producers
• Miners: Endeavour -2%, Fresnillo -1.4%, Antofagasta -1.8%, Anglo American -0.8% — falling base metal prices (as global growth fears rise) and a stronger dollar weighed on miners despite gold’s resilience
• Financials: Standard Chartered -1%, Barclays -1%, HSBC and Lloyds lower — higher oil inflation reduces consumer discretionary spending and raises concern about credit quality
• Healthcare: GSK +0.9% after positive interim trial results for cancer drug Jemperli provided a company-specific positive amid the broad market sell-off

The pattern is consistent with what we saw in the original Hormuz closure in March and the ceasefire collapse on 8 July: energy stocks decouple from the broader market, with the rest of the index broadly under pressure.

Which sectors and stocks are most exposed?

For UK investors assessing their portfolio exposure to the current escalation, three categories matter most:

• Positive exposure (oil prices rise): Shell (SHEL), BP (BP.), Harbour Energy (HBR), Energean (ENOG) — integrated and independent oil producers benefit directly from higher Brent prices
• Defensive positive (safe haven demand): BAE Systems (BA.), Rolls-Royce (RR.), Babcock International (BAB) — defence stocks typically hold up or advance in sustained geopolitical risk environments; BAE has tripled since mid-2021
• Negative exposure (fuel cost inflation): easyJet (EZJ), IAG (IAG), Wizz Air (WIZZ) — airlines face direct jet fuel cost headwinds. EasyJet is additionally complicated by the ongoing £7.15 Castlelake takeover process
• Indirect negative (consumer squeeze): retailers, housebuilders and consumer discretionary stocks are exposed through the second-order effect of energy price inflation on household budgets and BoE rate path

For a practical guide to energy sector investing, see IG’s guide to how to pick the best oil stocks.

What does tomorrow’s US CPI mean for this?

The US Consumer Price Index for June 2026 is released on 14 July at 8:30am Eastern Time (1:30pm UK time). This is the single most important data release of the week — and its relationship to the Iran conflict is direct.

The consensus is for headline CPI to fall 0.1% month-on-month, with the annual rate dropping from 4.2% to approximately 3.9%, driven by a 10% decline in gasoline prices in June — itself a result of the ceasefire period. However, analysts caution that a soft headline number does not mean inflation is under control: core CPI (which strips out energy and food) is expected to remain sticky at around 2.9% year-on-year (BMO Capital Markets / BLS, July 2026).

The critical interpretation for investors: if the Hormuz closure is confirmed or escalates further this week, the June gasoline decline reverses violently in July data — setting up an even hotter CPI print next month. Markets are trading the Iran situation and the CPI simultaneously today, with both pointing in the same direction: higher-for-longer rates, weaker equity sentiment, stronger energy stocks.

For more on how CPI affects markets, see IG’s guide to what CPI means for investors and traders.

What should UK investors watch this week?

• Shipping data: real-time tanker tracking and Lloyd’s war-risk premiums are the most reliable indicators of whether the Strait is functionally open or closed
• US diplomatic response: Trump’s public statements and any indication of back-channel negotiations will be the primary market-moving signal
• US CPI (14 July, 8:30am ET): a soft headline but sticky core number is the consensus — watch for the Fed’s reaction function, not just the number itself
• Bank of England communication: any MPC member comments on the inflation implications of renewed oil price pressure will be closely watched ahead of the August meeting
• Major US bank earnings (14 July): JPMorgan, Goldman Sachs and Wells Fargo all report Q2 results on 14 July — their loan loss provisions and trading revenue will give the first full read on how financial institutions have navigated the conflict period

Hormuz dispute summed up

• US launched fresh airstrikes on Iran over 12–13 July; Tehran claims Hormuz is closed; Trump says it’s open
• Market reaction: oil higher; FTSE 100 broadly lower but Shell +1.4%, BP +2.5%; miners and financials declining
• A disputed or partially-closed Strait functions like a real closure for oil supply pricing — the ambiguity itself is sufficient to move markets
• Key sectors: energy and defence are relative winners; airlines, retailers and consumer-facing stocks face headwinds
• US CPI tomorrow (14 July) will determine whether the soft June energy prices read as genuine disinflation or a one-month anomaly before renewed escalation
• Past performance is not a reliable indicator of future results. Capital at risk.

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