Oil Prices Surpass $90: Iran Blocks Hormuz, Attacks Spread Crisis in the Middle East
The conflict between the US and Iran has escalated to the closure of key maritime passages, and analysts warn that the global economy will feel the consequences.
The conflict between the US and Iran has escalated to the closure of key maritime passages, and analysts warn that the global economy will feel the consequences.
Crude oil prices on world markets surged on the last day of July, breaking the $90-per-barrel mark. Brent North Sea crude reached $90.16 in the afternoon, up $1.13 from the previous day, while US crude rose $1.75 to $85.34, HRT reported. The monthly price increase has exceeded 20 percent, the Klix.ba portal notes.
The escalation of the conflict in the Middle East provided the fuel for the price jump, particularly after the temporary cessation of hostilities between Washington and Tehran fell through. Iran's Revolutionary Guard stopped two tankers attempting to pass through the Strait of Hormuz, and four tankers changed course, the Iranian agency Fars reported. According to data from Kpler, two supertankers laden with oil loaded in the Persian Gulf nevertheless exited Hormuz on Friday, but traffic remains "thin."
The secretary of Iran's Supreme National Security Council, Mohammad Bagher Zolghadr, warned that continued US military escalation will further tighten the closure of the Strait of Hormuz. "The continuation of the naval blockade and US military actions will also lead to the closure of other strategic maritime chokepoints," Zolghadr told Al Mayadeen. He added that the consequences will be borne by the global economy, international energy markets, and American voters. Iran's Strait Administration announced that transit remains suspended due to new US attacks in the region.
Meanwhile, the Yemeni Ansar Allah movement blocked Saudi ports on the Red Sea early last week and attacked several Saudi tankers, with a message that navigation remains safe for all other ships. A source in the foreign ministry of northern Yemen rejected responsibility for the drone attack that caused a fire on two gas carrier ships in the Egyptian port of Damietta. On Thursday, 29 vessels carrying raw materials passed through the Bab al-Mandab Strait, HRT reports, citing on-the-ground data.
Riyadh has launched an initiative to form a coalition to guarantee the safety of maritime traffic in the Bab al-Mandab, Red Sea, and Gulf of Aden region. According to Saudi authorities, the initiative has been supported by 14 countries, including Turkey, Pakistan, Egypt, Sudan, and Djibouti.
The US intervention on maritime routes adds further strain. According to a report from Clash Report, relayed by the Telegram channel Slavyangrad, the United States prevented a Qatari LNG tanker bound for Pakistan because it had used the Iranian corridor in the Strait of Hormuz instead of a US-controlled route. The move further escalated tensions as fighting is already underway in the region, Iranian forces attacked a US base in Kuwait, and Saudi units joined US operations against Iran-backed groups in Iraq.
Oil prices are also influenced by factors other than geopolitics. Falling crude inventories in the US and a Ukrainian attack on a refinery in Russia's Volgograd have heightened concerns over supply disruptions. Yet market participants are increasingly less reliant on frontline news. "The market is no longer trading on war headlines but on maritime traffic data," SEB Research analyst Ole Hvalbye told HRT.
Separate OPEC calculations show that the price of a barrel of the members' oil basket rose by $1.05 on Thursday, to $89.44. The question is how the situation will affect European and Asian consumers, especially after warnings that the closure of strategic passages could jeopardize the long-term stability of energy supplies.
