Strait of Hormuz is in focus as Israel-Hamas war threatens to spread
Tankers depicted in the Strait of Hormuz — a strategically important waterway which separates Iran, Oman and the United Arab Emirates.
ATTA KENARE | AFP | Getty Images
It’s been nearly four weeks since Israel declared war on Palestinian militant group Hamas, and as the conflict in Gaza enters the second stage, concerns of a spillover into the wider Middle East region is also mounting.
Market observers are keeping a close eye on the the Strait of Hormuz — the world’s most important oil transit chokepoint, to see if there may be any potential impact.
The strait, which sits between Oman and Iran, is a vital channel where about one fifth of global oil production flow daily, according to the Energy Information Administration. It is a strategically important waterway linking crude producers in the Middle East with key markets across the world.
On Oct. 7, Hamas militants launched a multi-pronged attack by land, sea and air and infiltrated Israel, killing more than 1,400 people. In retaliation, Israel launched air strikes and a ground invasion into the Gaza Strip, which has so far killed more than 9,000 people in the enclave.
Risks of it spiraling into a wider conflict remain. The U.S. has deployed military assets to the region to support Israel which is fending off rocket volleys from Iran-backed militants in neighboring Lebanon and Syria.
The U.S. has also carried out airstrikes against targets linked to Iran’s Revolutionary Guard Corps in Syria.
A retaliation from Israel against Iran risks a closure of the strait, pushing oil prices to above $250 a barrel, a recent Bank of America note predicted. Iran is a major oil producer, and its proxies include Hamas and the Hezbollah, militant organizations that are respectively based in Gaza and Lebanon and have stated aims to destroy Israel.
Observers worry that Israel’s intense bombardment of the Gaza Strip will incite more of its adversaries to attack from new fronts, risking a spill over into the wider Middle East region.
However, some industry watchers say that a closure is unlikely.
“The probability of a supply disruption, especially the shutdown of the Strait of Hormuz, is of a low probability,” said Andy Lipow, president of Lipow Oil Associates. He said oil producers like Saudi Arabia, Iran, Iraq and Kuwait are still reliant on the revenue that comes with access to the strait.
Goldman Sachs echoed the same sentiment.
Analysts led by head of oil research Daan Struyven said in an Oct. 26 note that a “severe supply downside scenario” as a result of an interruption of trade through the Strait of Hormuz is not likely to materialize.
On Sunday, Iranian President Ebrahim Raisi said on social media platform X, formerly known as Twitter, that Israel had “crossed the red lines, which may force everyone to take action.”
Foreign ministers of Arab nations — including the United Arab Emirates, Jordan, Bahrain, Qatar, Kuwait, Saudi Arabia, Oman, Egypt and Morocco — condemned the targeting of civilians and violations of international law in Gaza by Israeli forces. Israel says it does not target civilians, only terrorist targets.
In 2019, Iran repeatedly threatened to disrupt oil shipments going through the Strait of Hormuz after former U.S. President Donald Trump withdrew from the landmark 2015 nuclear deal and restore sanctions on the Islamic country. In the past two years alone, Iran has attacked or interfered with 15 internationally flagged merchant vessels, according to data from the U.S. Navy.
On Monday, the World Bank projected that oil prices could surge to $157 per barrel should the ongoing conflict continues to escalate.
The World Bank warned of a repeat of the Arab oil embargo in 1973, where Arab energy ministers imposed an embargo on oil exports on the U.S. in retaliation for its support of Israel in the 1973 Arab-Israeli war.
In such a scenario, there could be a “large disruption” scenario, “that would drive prices up by 56% to 75% initially — to between $140 and $157 a barrel,” the report said.
Lipow said it’s not likely for such a scenario to take place.
Oil prices year-to-date
“Times are quite different today than they were 50 years ago, because you have these Mideast countries that simply need the [oil] revenue,” he said.
That said, Lipow pointed out that Iran has been “prosecuting the war through its proxies.”
“One of my fears is that maybe one of these proxies makes a very bad mistake when they’re attacking Israel,” he added. Should that happen, the analyst said Israel will likely retaliate, going “right for Iran’s jugular” which would deteriorate very quickly into a regional conflict.
A new Civic is in the works that’s bringing much more than just a new look to Honda’s best-selling vehicle. Here’s our first look at the next-gen Honda Civic.
Honda previews next-gen Civic with new hybrid system
During an event held for the media on Wednesday, Honda offered a look at some of the advanced new tech it plans to roll out over the next few years.
Although it just launched the current Civic Hybrid last year, Honda is already working on its replacement. Honda didn’t confirm or deny that the Civic was under the camouflage, but it was pretty evident.
The new Civic will ride on Honda’s next-gen hybrid (HEV) platform, designed for mid-size vehicles. Honda’s new hybrid system is nearly 200 lbs (90 kg) lighter and more flexible, which it said provides “excellent fuel economy” while also improving the driving experience.
According to Car and Driver, which drove the new Civic, the interior is also getting redesigned. Honda covered most of it, but you could still see what appeared to be a larger, at least 15″ infotainment screen at the center.
Honda is keeping most powertrain details a secret for now, but the new Civic appears to have an electrified drive unit similar to those found in the Accord and CR-V.
The company said the direct-drive motor and generator motor are smaller, more efficient, and free from rare-earth materials. Honda also said the battery, located under the rear seat, is all-new. It will be used for upcoming compact and mid-size vehicles, which Honda said will help reduce costs.
As for how it drives, Car and Driver said the new Honda Civic was quick off the line thanks to its direct-drive setup. However, the test track was too smooth to really judge the ride quality.
Like the new Honda Prelude, the Civic will feature S+ Shift, which simulates gear-shifting via paddles on the steering wheel.
The prototype had exhaust pipes, but they likely won’t make it to the production model. Honda plans to launch several next-gen hybrids on the new HEV platform, starting from 2027. The next-gen Honda Accord may even arrive before the Civic, debuting on the hybrid system.
Honda said it’s also developing a next-gen platform for large-size HEVs to meet the growing demand in North America.
Using a next-gen V6 engine with extended fuel-efficient range, Honda said it aims to improve fuel efficiency by 30% compared to its current ICE vehicles. Honda’s larger HEVs will likely go on sale closer to 2028.
Honda also showcased the Super-ONE Prototype during the event, its compact EV set to launch in Japan in 2026, followed by the UK and other global markets.
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Zero Motorcycles turned heads in Milan at EICMA 2025 with the unveiling of its new LS1 electric scooter, a sleek and practical 60 mph (100 km/h) commuter built for European city streets. With its swappable batteries, off-board charging, and smart safety tech like ABS and traction control, the LS1 is clearly a strong contender in the urban EV space. It also marks a major shift for Zero, expanding beyond full-size electric motorcycles into a more accessible, everyday format.
But will it come to the US market?
At the show I had the chance to speak with James Callahan of Zero, and he confirmed that the LS1 is not coming to the US market, at least not in its current form or in the near future. “The scooter market in the US is still very small,” Callahan explained, “so for now, we’re focused on Europe, where the demand is much higher.”
And while interest from American riders may exist, there’s another hurdle: the LS1 isn’t homologated for the US, meaning it doesn’t meet certain regulatory standards like the NHTSA’s lighting requirements. Its slick continuous LED turn signal bar would need to be redesigned entirely, among other tweaks to the design.
The LS1 comes equipped with two removable batteries that live in the floorboard and can be charged indoors using an 800W charger – or even faster with a 1,500W upgrade. A third battery can be added under the seat for extended range, while that same underseat storage area also hides a cavity large enough for a helmet or groceries.
Add in a low seat height, a short wheelbase, and user-friendly features, and you’ve got a solid commuter platform. But it’s a platform that we’re not likely to see in the US for a long time.
So while the LS1 represents an exciting new chapter for Zero in Europe, fitting with the company’s recent move out of California and into the Netherlands, don’t expect to see it zipping down US streets anytime soon.
Though it’s not all bad news for our American readers. There’s a spark of hope that Zero’s more affordable off-road electric motorcycles launched in the US market this year could be getting street-legal homologation, though not immediately. More on that soon…
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Environment
Toyota’s selling cars faster than it can build them, saying it can ‘barely cover the demand’
Toyota is selling cars faster than it can build them. With strong demand for hybrids, the company says it can “barely cover the demand.”
Toyota’s hybrids fuel sales growth in 2025
After reporting its fiscal second-quarter earnings on Wednesday, Toyota raised its sales and earnings forecast for the year.
In the first half of the fiscal year, the company sold a record 5.27 million vehicles, up 105% compared to the same period in 2024. Those numbers include its luxury Lexus brand.
Toyota said “strong demand from customers around the world” led to higher sales, particularly in Japan and North America. Hybrid vehicles primarily drove growth, with higher demand in competitive markets such as North America and China.
The Japanese automaker sold 2.27 million hybrids (HEVs) in the first six months of the fiscal year 2026. Including battery-electric vehicles (BEVs), plug-in hybrids (PHEVs), and fuel-cell electric vehicles (FCEVs), Toyota’s total “electrified” vehicles accounted for 47% of its total sales.
Toyota said the new RAV4, its best-selling vehicle globally, is carrying the growth as the first to adopt its software-defined platform, Arene.
Like most automakers, Toyota took a hit from the US auto tariffs. The company expects the 15% tariff will cost an extra 1.45 trillion yen ($9.4 billion) in the fiscal year.
Toyota expects higher sales, and cost-cutting measures will lessen the blow. It raised operating profit guidance for the fiscal year ending March 31, 2026, to 3.4 trillion yen ($22 billion). That’s up from its previous guidance of 3.2 trillion yen ($20.8 billion), but still a 28% decrease compared to the previous fiscal year.
“In terms of sales, we expect a very healthy situation going forward,” Toyota’s CFO, Kenta Kon, said during a news conference with reporters on Wednesday (via Automotive News).
According to Kon, Toyota is still seeing “strong demand,” so much so that “we can barely cover the demand,” he added.
Electrek’s Take
Although hybrids are carrying the growth, Toyota’s BEV sales are still lagging. In the US, Toyota sold just 61 bZ electric SUVs in September. Through the first nine months of the year, Toyota sold just 12,264 bZs, down from 13,577 in the same period last year.
With the 2026 BZ upgrade rolling out and new EVs arriving soon, including the C-HR and bZ Woodland, Toyota’s BEV sales are expected to gain momentum over the next few months finally.
At the Japan Mobility Show, the company revealed plans for five unique brands under the Toyota Group, which it says will provide a diverse range of vehicles designed for every buyer.
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