Oil tankers damaged
At least three tankers were damaged off the Gulf coast and one seafarer was killed as Iranian retaliation for US and Israeli strikes on Iran exposed ships to collateral damage, shipping sources and officials said.
Meanwhile the Organisation of Petroleum Exporting Countries (OPEC), said it would increase production by 206,000 barrels per day in April, which was more than analysts had been expecting.
The countries boosting output include Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman.
Strait of Hormuz a critical chokepoint
Roughly 15 million barrels of crude oil per day - about 20 per cent of the world's oil - are shipped through the Strait of Hormuz, making it the world's most critical oil chokepoint, according to Rystad Energy.
Tankers travelling through the strait, which is bordered in the north by Iran, carry oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the UAE and Iran.
Iran had temporarily shut down parts of the strait in mid-February for what it said was a military drill. Further disruptions to that shipping channel could lead to lower supply and higher prices for oil.
Iran exports roughly 1.6 million barrels of oil a day, mostly to China, which may need to look elsewhere for supply if Iran's exports are disrupted, another factor that could increase energy prices.
Scenarios before the latest conflict with Iran foresaw a quick price spike that fades if the attacks didn't affect oil shipping and infrastructure, such as Iranian pipelines and its Kharg island terminal.
However, there would be a bigger price spike and longer-lasting impact if oil infrastructure or supplies were interrupted because of the disruption of tanker traffic through the Strait of Hormuz.
