Global oil prices are showing significant increases due to the near-total blockade of supplies through the Strait of Hormuz amid the military conflict between the U.S., Israel, and Iran. The price of Brent futures rose by $2.74, or 2.7%, reaching $102.95 per barrel, while U.S. oil West Texas Intermediate (WTI) increased by $2.45, or 2.6%, to $95.95 per barrel.
This is reported by Finway
Blockade of the Strait of Hormuz and Its Impact on Prices
The Strait of Hormuz is a strategic route for approximately 20% of global oil and liquefied natural gas trade. Its passage is now significantly complicated due to the ongoing armed conflict, which has lasted for three weeks, raising concerns about further disruptions in energy supplies and rising inflation worldwide.
In the previous trading session, Brent prices fell by 2.8%, and WTI by 5.3%, following a partial resumption of movement for certain vessels through the Strait of Hormuz. However, new threats have forced markets to return to a scenario of scarcity.
“The risks remain serious: it only takes one Iranian militant to launch a missile or plant a mine under a tanker to reignite the entire situation,” noted IG market analyst Tony Sycamore in his analytical report.
Geopolitical Tensions and Additional Factors
The situation is further complicated by the refusal of several U.S. allies to respond to President Donald Trump’s call for military ships to escort tankers in the conflict zone. This stance from allies provoked a sharp reaction from the American leader, who accused partners of ingratitude for decades of support.
Another factor contributing to the price increase was a fire in the Fujairah oil production area in the UAE, caused by a drone attack during Asian morning trading. This further undermined market confidence in the stability of supplies.
As a result of these events, crude oil prices in the Middle East reached historic highs, making it the most expensive in the world. Traders link the rapid price increase to a decrease in available stocks for export.
On Monday, March 16, oil prices were already showing an increase as investors heightened their focus on risks to the Middle East’s oil and gas infrastructure, despite repeated calls from the U.S. president to the international community to ensure the safety of shipping in the strategic strait.