US Imposes Blockade on Iran, Sending Oil Prices Soaring Above $103

US Announces Naval Blockade of Iran, Impact on Global Markets

The United States has announced a naval blockade of Iran, which is expected to have significant implications for global oil markets and financial markets in Asia.

On Sunday, US President Donald Trump stated that the US Navy would block all ships from entering or exiting the Strait of Hormuz. The announcement was made following the collapse of ceasefire talks between US and Iranian officials over the weekend.

According to a statement by US Central Command, the blockade will only affect vessels traveling to and from Iran, with other traffic not being impeded. The command stated that the blockade would take effect on Monday at 10am Eastern Time (14:00 GMT).

The news has led to a sharp increase in oil prices, with Brent crude rising over 8 percent to top $103 a barrel. This is the first time the benchmark has risen above the psychologically important threshold of $100 since Tuesday.

Global markets have also been affected by the announcement, with major stock markets in Asia opening lower on Monday. Japan’s benchmark Nikkei 225 fell 0.9 percent in morning trading, while South Korea’s KOSPI dropped more than 1 percent. US stock futures also fell, with those tied to the benchmark S&P 500 down about 0.8 percent.

The Strait of Hormuz is a critical waterway that accounts for approximately one-fifth of global oil and natural gas supplies. The blockade has reduced traffic through the strait significantly, with only 17 vessels crossing the area on Saturday, according to maritime intelligence firm Windward.

Source: Al Jazeera