Oil prices soared following fresh US attacks
Oil prices surged again on Tuesday following fresh US strikes against Iran.
The latest US attacks began after Iranian forces struck a commercial vessel in the Strait of Hormuz on Sunday morning, and Tehran subsequently announced it was closing the waterway, through which around 20 per cent of the world’s oil and gas transits in peacetime.
The US launched a series of strikes against targets in the Islamic Republic, whilst Tehran retaliated by striking targets in Bahrain, Jordan, Kuwait and Oman.
On Monday, US President Donald Trump promised to reimpose a naval blockade on Iranian ports, although he stated that an agreement with Iran was still possible.
“The prospect of the fighting continuing and a new blockade being imposed means that traffic through the strait has almost completely ground to a halt,” – said Kathleen Brooks, head of research at the trading group “XTB”.
“When the supply chain gets jammed, that’s precisely why oil prices start to rise,” she added.
The international benchmark – North Sea “Brent” crude – rose by as much as 5 per cent on Tuesday and was trading at around US$87 per barrel.
On Monday, oil prices had already surged by more than 9 per cent.
A strategically important strait
Previous attacks by Tehran on ships in the strait had also triggered exchanges of fire between the US and Iran.
These tensions threaten the interim agreement aimed at ending the war in the Middle East. It arose in late February following an intensive bombing campaign by the US and Israel, during which Iran’s former Supreme Leader Ali Khamenei was killed.
The main obstacle to a final agreement is the future of the Strait of Hormuz, which Iran had already closed to commercial shipping at the outbreak of the war.
This waterway is the main channel for oil and gas exports from the Persian Gulf, and its closure during the war had a severe impact on the global economy.
Iran is demanding control over the passage of ships and plans to levy tolls, whilst Washington rejects this demand.
Under international law, states are generally not permitted to impose tolls on straits used for international shipping.
On Monday, the US President announced that the US is renewing the naval blockade of Iranian ports imposed in the spring, and that Washington itself will impose a 20 per cent levy on the value of cargo on ships passing through the Strait of Hormuz.
“From now on, the United States will be known as the ‘Guardians of the Strait’, but as such, and in the interests of justice, will receive 20 per cent compensation on the value of all cargo transported to cover all costs necessary to carry out the mission, which aims to ensure safety and security in this highly unstable region of the world. “This process and the organisational measures will begin immediately,” Mr Trump announced on his “Truth Social” platform.
