Crude prices climb as attacks on vessels and expanding maritime restrictions raise fresh concerns over global energy supplies…..
Oil prices have climbed above $100 a barrel after Iran intensified restrictions on shipping through the Strait of Hormuz and reported attacks on vessels attempting to navigate the strategically important waterway.
Brent crude, the international benchmark, stood at $101.28 a barrel in early Asian trading on Thursday, following a sharp rise above the $100 mark a day earlier. It was the first time the benchmark had crossed that threshold since July.
The latest price surge followed reports by Iranian state media that the country’s Revolutionary Guards had targeted two U.S. vessels, eight oil tankers and 10 other vessels described as “non-compliant” while attempting to pass through the strait.
The United Kingdom Maritime Trade Operations agency also confirmed that several merchant vessels in the Northern Arabian Gulf and Gulf of Oman had been subjected to disabling fire amid continuing military activity in the region.
The Strait of Hormuz remains one of the world’s most important energy corridors, normally handling about one-fifth of global oil supplies. Any prolonged disruption to traffic through the waterway therefore carries significant implications for international energy markets.
Iran further tightened its restrictions on Wednesday by extending a previously declared no-go zone beyond the strait into parts of the Gulf of Oman and Arabian Sea.
The Revolutionary Guards said vessels entering the newly designated area without prior coordination would face sanctions, although the exact coordinates of the expanded zone are yet to be released.
Traffic through the waterway has been severely disrupted since the conflict between Iran and the United States began on February 28. Tehran says vessels must obtain permission and pay transit fees before being allowed to use the strait.
Despite the escalating tensions, U.S. President Donald Trump has maintained that the war will end soon and that oil prices will subsequently fall.
Speaking to Republicans in Texas, Trump said oil prices would decline “as soon as” the United States wins the war with Iran.
“We’re winning it. We control the Hormuz Strait,” Trump said, while again suggesting that the waterway should be renamed the “Trump Strait”.
Trump also predicted that the conflict would end shortly after the U.S. midterm elections in November, arguing that Iran “can’t hold out any longer”.
However, that assessment has been challenged by reports that some of Trump’s senior advisers privately believe the conflict could continue through the remaining two years of his presidency.
Iran has also expanded its military response across the region.
The Revolutionary Guards said they had struck a U.S. military base in Jordan in retaliation for American forces destroying five Iranian oil tankers a day earlier.
Jordan’s military said it intercepted 18 missiles launched towards the kingdom.
Iran’s Foreign Ministry condemned the attacks on its tankers as “an overt threat to regional and international peace and security”, warning that the strikes could further escalate tensions across the region.
Tehran maintained that its attacks on U.S. military installations were carried out in self-defence.
The U.S. military, meanwhile, said its actions followed an Iranian attack targeting an American warship, marking the second reported incident of its kind in less than a week.
Iran Sets Conditions For Ending War
While military tensions continue to rise, Iran says an end to the conflict remains possible if Washington meets a series of demands.
Revolutionary Guards spokesman Hossein Mohebi said Tehran expects the United States to stop issuing renewed threats, withdraw Israeli forces from Lebanon, end the blockade of Yemen and release $24 billion in Iranian assets currently frozen abroad.
Iran also wants Washington to refrain from interfering with its nuclear and missile programmes.
The demands come as the United States intensifies economic pressure on Tehran.
Adding to that pressure, the International Atomic Energy Agency’s board of governors voted on Wednesday to refer Iran to the United Nations Security Council over its nuclear “non-compliance”.
The resolution was approved by 23 votes to three, with eight countries abstaining. Russia, China and Niger voted against the measure.
Iran’s representative to the UN nuclear watchdog rejected the decision, accusing Washington of exerting pressure to secure its adoption and arguing that the resolution “has no basis and will not bring any results”.
Israel, meanwhile, continues to maintain that the pressure on Iran is weakening the country’s leadership.
Israeli Prime Minister Benjamin Netanyahu renewed his claim that Iran is close to collapse.
“The main task is to bring down the terror regime in Iran. We are very close to that,” Netanyahu said during a visit to Israeli troops in southern Syria, where Israel has established what it describes as a security zone.
With restrictions around the Strait of Hormuz expanding and military exchanges continuing, concerns over the duration of the conflict and its potential impact on global energy supplies remain at the centre of the oil market.
