Global oil prices continue to rise due to the ongoing blockade of the Strait of Hormuz by Iran and the serious risk of escalating conflict in the region. As of the morning of April 7, Brent crude futures increased by $1.44 (1.3%) to reach $111.21 per barrel. American WTI crude rose by $2.32 (2.1%) to $114.73 per barrel.
This is reported by Finway
Rising Tensions and Impact on the Oil Market
The oil market is under pressure from a deadline set by the U.S. requiring Iran to reopen the Strait of Hormuz. Failure to comply with this demand threatens Tehran with severe consequences, including military action. Iran’s refusal to adhere to a ceasefire and continued attacks on energy and shipping targets only heighten traders’ and analysts’ concerns about the potential for large-scale hostilities in the region.
“Oil is holding its ground because the risk of hostilities is no longer theoretical. Attacks on energy and shipping targets continue, and traders fear that even if the war ends, damage to infrastructure could take oil out of circulation for months, not days,” said an expert.
Export Reductions and Record Oil Premiums
Oil exports from Gulf countries have significantly decreased due to transportation restrictions through the Strait of Hormuz, which Iran closed following U.S. and Israeli attacks at the end of February. This situation has already led to a substantial reduction in global oil supplies, which in turn has caused record increases in spot premiums for WTI crude in the U.S. Asian and European refineries are urgently seeking alternative supply sources due to disruptions caused by the war in the Middle East.