Oil prices jumped Monday morning after Iran's semi-official Fars news agency reported that two missiles struck a U.S. Navy vessel near the Strait of Hormuz, though U.S. officials immediately denied the claim . The U.S. military rejected Iranian claims to have struck an American warship trying to enter the strait , with Central Command stating "No U.S. Navy ships have been struck" and that "U.S. forces are supporting Project Freedom and enforcing the naval blockade on Iranian ports" .

The disputed incident came as President Donald Trump announced "Project Freedom" to guide stranded ships from the Iran-gripped Strait of Hormuz, giving few details about what could be a sweeping attempt to help hundreds of vessels and some 20,000 seafarers . According to market data, WTI crude traded at $71.50 per barrel on Monday, up 0.6%, while Brent crude stood at $75.20 per barrel, up 0.5%.

Iran has blocked nearly all shipping into and out of the Gulf apart from its own since the start of the war, cutting off around a fifth of the world's oil and gas shipments and sending oil prices soaring by 50% or more . Ships and seafarers, many on oil and gas tankers and cargo ships, have been stuck in the Persian Gulf since the war began, with crew members describing to The Associated Press seeing intercepted drones and missiles explode over the waters as their vessels run low on drinking water, food and other supplies .

Military Standoff Intensifies at Critical Chokepoint

Iran's unified command warned that "any foreign armed forces, especially the aggressive US army, will be attacked if they intend to approach and enter the Strait of Hormuz," with hours later Iran's semi-official Fars news agency saying two missiles hit a US warship at the southern end of the Hormuz Strait . U.S. Central Command said it would support the rescue effort with 15,000 military personnel and more than 100 land- and sea-based aircraft, plus warships and drones, with Admiral Brad Cooper stating "Our support for this defensive mission is essential to regional security and the global economy as we also maintain the naval blockade" .

Central Command said a short time later that two U.S.-flagged merchant vessels had successfully transited through the strait "as a first step" in Trump's new mission . Tehran has effectively closed the strait by attacking and threatening ships, and the threat level in the area remains critical , while since April 13, the US has blockaded Iranian ports, leading to a "dual blockade" of the strait .

European Heat Pump Sales Surge on Energy Price Fears

As fossil fuel prices remain elevated due to the Middle East conflict, European consumers are accelerating their shift away from gas heating. In the UK, which has historically had one of Europe's worst uptakes, heat pump sales in the first three weeks of March – when the US-Israel conflict in the Middle East began – increased by 51 per cent compared to the same period the month before, according to energy firm Octopus Energy .

The Financial Times reported that high demand for heat pump units in Europe suggests green technologies are benefiting from the energy price surge due to the Iran war. As the war on Iran continues to highlight the dangers of fossil fuel reliance, heat pumps have bounced back into the limelight , with the increasing volatility of fossil fuel prices making the predictable operational costs of heat pumps a significant advantage .

Natural Gas Markets Show Divergent Trends

While European gas prices swung wildly on Hormuz developments, U.S. natural gas markets showed different dynamics. According to market data, Henry Hub natural gas traded at $3.25 per MMBtu on Monday, down 2.4%. Natural Gas Intel reported that supportive forecast trends over the weekend helped keep natural gas futures in flat territory to start the trading week .

On the power generation front, Natural Gas Intel reported that US natural gas-fired power generation pulled further ahead of prior-year levels in April, as lower Henry Hub natural gas prices fueled stronger dispatch across nearly every region even as mild spring weather kept a lid on overall demand . The publication noted that natural gas power burns surged 10% in April as lower prices boosted the fuel's edge over coal.

OilPrice.com reported that European benchmark natural gas prices erased an early 3% loss at Monday opening and were up by 1.3% in morning trade in Amsterdam, as the commodity markets watch with apprehension the latest U.S.-Iran standoff at the Strait of Hormuz . The front-month contract of the Dutch TTF Natural Gas Futures was up by 1.3% at $39.67 per megawatt-hour on Monday .

The ongoing crisis underscores the fragility of global energy supply chains, with Trump under pressure to break Iran's hold on the Strait of Hormuz to try to prevent soaring gasoline prices, causing a voter backlash against his Republican Party in midterm congressional elections in November . As negotiations between Washington and Tehran continue through Pakistani mediators, energy markets remain on edge over the fate of a waterway that typically carries about a fifth of the world's oil trade.