US and Iran at impasse over oil prices in Strait of Hormuz

US-Iran Tensions Spark Oil Price Surge

Oil prices have increased significantly following heightened tensions between the US and Iran in the Strait of Hormuz. The international benchmark, Brent crude, rose to $106.80 per barrel as of 01:00 GMT on Friday, a nearly 5% increase from its closing price on Wednesday.

The surge in oil prices is attributed to the recent tit-for-tat captures of commercial vessels by Washington and Tehran. The US Navy has announced that it will require permission for vessels to transit the key waterway, which normally carries about one-fifth of the world’s supply of oil and natural gas.

US President Donald Trump made a statement on Thursday, ordering the US Navy to destroy any Iranian boats laying mines in the strait. He also stated that no ship can enter or leave the strait without the approval of the US Navy. The Pentagon had previously announced the seizure of a tanker carrying sanctioned Iranian oil for the second time in less than a week.

Iran’s Islamic Revolutionary Guard Corps has captured two foreign cargo ships, including a Panamanian-flagged vessel and a Greek-owned ship, which it claims were operating without necessary permits and tampering with navigation systems. The Greek Maritime Affairs and Insular Policy Ministry has denied that the Epaminondas was captured and maintains control of the vessel.

The Strait of Hormuz has seen a significant decrease in commercial vessels transiting the waterway, with only nine vessels passing through on Wednesday compared to 15 on Monday. The average daily number of transits before the US and Israel launched their war against Iran on February 28 was 129.

Source: Al Jazeera