The US Navy is preparing to blockade ships sailing to and from Iran through the Strait of Hormuz. That could limit Iran’s oil exports after Washington and Tehran failed to reach an agreement over the weekend to end the war.
Brent North Sea crude, the world’s most widely used benchmark for oil prices, rose 7.3 percent to $102.30, and West Texas Intermediate rose 8.7 percent to $104.94. “The failure of the weekend negotiations has raised concerns about the deepening of the global energy crisis,” stated the BBC.
At the same time, last week on Wednesday, the price of oil fell well below the hundred dollar mark after Washington and Tehran agreed on a conditional two-week truce, which includes the opening of the key trade waterway through the Strait of Hormuz.
The strait, through which a fifth of the world’s energy supplies passed until the outbreak of war in Iran at the end of February, became a key focus of the conflict after Tehran responded to US-Israeli strikes by threatening to attack vessels that try to use it. Disruption of supplies then led to a sharp rise in energy prices around the world.
Traffic is still largely stopped in the Strait of Hormuz, although some countries such as India and Malaysia have negotiated safe passage for their ships.
On the announced American blockade of Iranian ports, which is to begin on Monday afternoon, stock markets in Asia responded by falling.
In a number of countries, fuel prices will probably rise again. Trump admitted on Sunday that oil and gasoline prices in the US may remain high until the November congressional elections. According to Reuters, it is a rare admission by Trump of the possible political consequences of his decision to attack Iran six weeks ago.
