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Oil Prices Surge as US Blockades Iranian Ports
13 Apr
Summary
- US declared blockade on Iranian ports starting Monday.
- Oil prices jumped with US crude up 8% and Brent crude up 7%.
- Strait of Hormuz, crucial for oil, faces limited traffic post-ceasefire.
Oil prices experienced a notable increase in early market trading on Sunday, driven by the U.S. declaration of a blockade on Iranian ports commencing Monday.
U.S. crude oil prices rose by 8% to $104.24 per barrel, while the international standard, Brent crude oil, saw a 7% increase, reaching $102.29. This follows significant fluctuations in Brent crude prices, which had previously risen from approximately $70 per barrel before late February to over $119 at times.
The blockade, announced by U.S. Central Command, will be impartially enforced against vessels entering or departing Iranian ports and coastal areas. Approximately one-fifth of the world's daily traded oil typically transits through the Strait of Hormuz, a critical waterway for global oil shipping.
Marine trackers noted that traffic in the Strait has remained limited, with over 40 commercial ships crossing since the ceasefire began. Experts suggest the blockade could tighten oil markets further, potentially serving as a negotiation tactic for future gains, though concerns exist about its impact on global oil prices and the Iranian economy.
