Oil prices jumped Tuesday as the war in the Middle East disrupted shipping in the pivotal Strait of Hormuz, pushing crude prices above US$74 a barrel.

Canadian oil producers, however, aren’t suddenly rushing out with plans to spend additional revenue.

But they’re not sitting on their hands, either.

“About a month-and-a-half ago, with $55 (oil), we were like ‘batten the hatches, tighten the belts,’ all that stuff. And now, with $77 that it hit this morning, (at) Surge, we’re hedging,” Paul Colborne, CEO of Calgary-based producer Surge Energy, said Tuesday.

“We put on some nice hedge positions to lock in our 2026 cash flows . . . These are very volatile events right now, shaping the price. So we’re just locking it in — and if it goes higher, I’ll lock in some more.”

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Since the U.S. and Israel launched air strikes on Iran on Saturday — and Tehran responded by attacked neighbouring Gulf states and energy infrastructure in the region — oil markets have moved higher, up sharply from markets that were below $58 a barrel to start the year.

West Texas Intermediate (WTI) crude closed Tuesday at US$74.56 a barrel, up $3.33 on the day — and topping $77 at one point — as attacks in the region escalated.

Iranian officials declared the strategic Strait of Hormuz, which touches Iran to the north and Oman to the south, is closed, insisting any ships that move through the waterway would be targeted and burned.

Bloomberg reported that Iraq has begun shutting in oil production at its largest........

© Calgary Herald