Oil prices remain above $100 per barrel due to Iranian control

Global energy markets continue to experience volatility as tensions in the Middle East escalate. The price of oil has surpassed $100 per barrel, with Brent crude rising over 9% on Thursday. This surge is attributed to concerns about a prolonged war in the region, which may disrupt global energy supplies for an extended period.

The Strait of Hormuz, a critical waterway that transports approximately one-fifth of global oil supplies, remains closed due to Iranian threats. As a result, only a handful of vessels have passed through the strait each day since the US and Israel launched joint strikes on Iran on February 28. The UKMTO centre reports that at least 16 commercial vessels have been attacked in the region since the start of the conflict.

The International Energy Agency’s announcement to release 400 million barrels of oil from emergency stockpiles was met with a muted response from traders, who cited a daily shortfall in global supplies estimated at 15-20 million barrels. The US Department of the Treasury also issued a temporary licence authorizing countries to purchase sanctioned Russian oil that has been stranded at sea, but this move did not significantly impact the market.

Energy experts have expressed concerns about the lack of tangible goals in the conflict, which makes it challenging for traders to anticipate a resolution. The Pentagon has yet to conduct naval escorts through the strait, citing concerns about the risks posed by Iranian attacks. US Energy Secretary Chris Wright stated that such operations could begin by the end of the month, but emphasized that they cannot be implemented immediately due to safety concerns.

As the situation in the Middle East continues to unfold, global energy markets remain on high alert, with prices showing little signs of relief.

Source: Al Jazeera