Nine ships attacked in a week — is your petrol price about to spike again?

Picture Credit: The Daily Express

A sharp escalation in the Strait of Hormuz is raising fresh fears of another fuel-price shock for countries that rely heavily on imported energy, and Sri Lanka is near the top of that list. Since July 6, Iran has reportedly attacked at least nine commercial vessels in and around the strait, attempting to push shipping traffic away from the US-patrolled corridor off Oman and toward routes closer to Iranian territorial waters. One seafarer was killed this week after the tanker Al Bahyah was struck off the coast of Oman, while tanker traffic through Hormuz has fallen to a three-week low.

Oil markets have reacted quickly. Brent crude has risen more than 6% in a week and is trading around $88-90 per barrel, reflecting concerns that a wider disruption could remove millions of barrels of supply from global markets. The Strait of Hormuz is one of the world’s most important energy chokepoints, carrying roughly 20% of global oil trade as well as significant volumes of liquefied natural gas. When traffic through that corridor becomes uncertain, prices tend to move long before any actual shortage appears at the pump.

For Sri Lanka, the impact is unusually direct. The country imports nearly all of its crude oil and refined fuel, meaning higher Brent prices typically feed through to CPC retail fuel prices within weeks. A sustained increase in oil prices would also put pressure on the current account, foreign exchange reserves and the rupee, reviving uncomfortable memories of the 2022 crisis when soaring fuel costs became one of the key triggers of the broader economic collapse.

Picture Credit: ABC News

The good news is that Gulf exporters are not completely dependent on the strait. The UAE’s Fujairah route and Saudi Arabia’s East-West pipeline to the Red Sea provide alternative pathways that can keep some oil flowing even if Hormuz remains partially disrupted. However, those routes have limited spare capacity, and shipping insurers have already begun charging higher war-risk premiums for tankers operating in the region. Those insurance costs are often passed through the supply chain and can raise the landed cost of fuel delivered to Colombo even if the crude itself remains available.

The key question is no longer whether Sri Lanka has enough fuel today — it does. The question is whether this becomes a short-lived geopolitical scare or a sustained disruption lasting several weeks or months. If attacks continue and Brent remains near $90 or climbs higher, households could begin feeling the effects through higher petrol, diesel and transport costs before the end of the quarter. After the trauma of 2022, that is a scenario policymakers in Colombo will be watching with exceptional urgency.