Hormuz Contested, Oil on Fire!
Oil prices surged again after the United States concluded a new wave of attacks on Iran. This increase occurred amid a debate between the two countries over the status of the Strait of Hormuz, whether the vital waterway was still open or closed.
Brent crude rose above US$78 per barrel after strengthening more than 5% last week. Meanwhile, West Texas Intermediate, or WTI, was hovering around US$74 per barrel. At 11:19 a.m. Singapore time, Brent for September delivery rose 4.1% to US$79.15 per barrel, while WTI for August delivery rose 4.2% to US$74.40 per barrel.
US Central Command, or CENTCOM, stated that it had struck dozens of Iranian targets on Sunday. The attacks were said to be aimed at weakening Iran's ability to attack international vessels passing through the Strait of Hormuz. This waterway is highly sensitive as it is one of the world's main oil and gas trade routes.
Iran had previously declared the Strait of Hormuz closed until further notice. At the same time, Iran launched retaliatory drone and missile attacks on US allies in the Middle East, including Jordan and Qatar. Kuwait also reported that an offshore drilling platform was hit and damaged.
These tensions have again added a premium to oil prices. Traffic through the Strait of Hormuz was reportedly almost non-existent on Monday, although the southern shipping lane coordinated by Oman remained open. This situation has raised market concerns that global energy supplies could be disrupted if the conflict continues.
The prospects for diplomacy have further dimmed after Iran's chief negotiator, Mohammad Bagher Ghalibaf, declared the era of unilateral agreements over. Iran is demanding that the US honor its commitments regarding Hormuz and normalize oil exports before talks can resume. If the conflict begins to target energy infrastructure more broadly, analysts warn that oil prices could potentially move towards US$100 per barrel. (asd)
Source: Newsmaker.id
