Irans Proposal Fails to Stabilize Oil Prices Amid Rising Tensions

Iran Offers to Reopen Strait in Exchange for Nuclear Talks Deferral

The price of Brent crude oil rose by more than 1 percent on Tuesday as traders continued to monitor the situation in the Strait of Hormuz. The international benchmark, which is used to set prices globally, reached $109.42 per barrel at 03:30 GMT.

Iranian Foreign Minister Abbas Araghchi shared proposals with Pakistan to reopen the strait, which has been blocked by Iran since February. The US has not commented publicly on the proposal, which would delay discussions about Iran’s nuclear program in exchange for lifting the blockade.

The Strait of Hormuz is a critical waterway for global fuel supplies, and its blockade has reduced maritime traffic significantly over the past two months. According to ship tracking data, only eight vessels crossed the strait on Sunday, down from 19 transits the previous day.

In February, an average of 129 vessels passed through the strait each day, according to the United Nations Trade and Development (UNCTAD). The blockade has reduced global oil production by 14.5 million barrels per day, according to a Goldman Sachs estimate.

Shipping and logistics experts have warned that it will likely take months for energy flows to return to normal even if a deal is reached between the US and Iran. The backlog of unloaded oil and gas, damage to infrastructure, and need to clear the waterway of Iranian mines are among the challenges that must be addressed.

Source: Al Jazeera