Oil prices have risen sharply, with Brent crude climbing 7.05% to reach $101.91 per barrel, while West Texas Intermediate (WTI) increased by 7.86% to $104.16 per barrel. This surge follows the breakdown of negotiations between Washington and Tehran regarding the cessation of hostilities.
U.S. President Donald Trump announced the initiation of a maritime blockade, acknowledging that fuel prices may remain elevated until the midterm elections in November. The current market dynamics are reminiscent of conditions prior to the ceasefire, with the U.S. poised to block up to 2 million barrels of oil per day associated with Iran, traversing the Strait of Hormuz.
The U.S. Central Command (CENTCOM) has stated that the blockade will commence on Monday at 17:00 Kyiv time. This restriction will apply to vessels from all nations entering or exiting Iranian ports, although U.S. military forces will not impede transit to ports in other countries.
The Islamic Revolutionary Guard Corps of Iran has warned that the approach of foreign military vessels to the Strait of Hormuz will be viewed as a violation of the ceasefire and will elicit a strong response.
According to LSEG data, many oil tankers are currently avoiding the Strait of Hormuz. In a related development, Saudi Arabia announced on April 12 that it has resumed full oil pumping through the East-West pipeline, which has a capacity of approximately 7 million barrels per day, following repairs to energy infrastructure damaged in recent Iranian attacks.
Oil prices have surged past $100 per barrel as the U.S. prepares to implement a blockade affecting Iranian oil shipments. This decision follows failed negotiations between the U.S. and Iran, raising concerns about ongoing regional tensions and market stability.
Source: Reuters