US and Iran Trade Fire in Strait of Hormuz, Oil Prices Rise

US-Iran Clashes in Strait of Hormuz Spark Oil Price Surge

Oil prices surged on Thursday as clashes between the United States and Iran in the Strait of Hormuz pushed their fragile ceasefire to the brink. The price of Brent crude rose by up to 7.5 percent during a volatile trading session, before easing as Asian markets opened on Friday morning.

As of 03:00 GMT, the international benchmark stood at $101.12 per barrel, down from its day’s high of $103.70. The latest increase came after the US and Iran exchanged fire in the critical waterway, which is a key conduit for about one-fifth of global oil and natural gas supplies.

According to US Central Command (CENTCOM), the US launched strikes on Iran after three US Navy guided-missile destroyers were attacked by Iranian missiles, drones, and small boats. Iran’s Khatam al-Anbiya Central Headquarters accused the US of violating the ceasefire by attacking an Iranian oil tanker and another vessel in the vicinity of the waterway.

The Iranian military headquarters also claimed that the US targeted civilian areas, including Qeshm Island. US President Donald Trump appeared to downplay the clashes on Thursday, stating that the ceasefire remained in effect. However, Iran’s state-run Press TV reported that the situation had returned to normal.

Shipping in the strait has been at a near standstill since late February due to the threat of Iranian attacks on massive oil tankers. The price of Brent crude is up about 40 percent compared with before the conflict, amid an estimated shortfall in daily production of 14.5 million barrels.

Source: Al Jazeera