Iran has announced that commercial shipping through the strategically vital Strait of Hormuz will remain fully open for the duration of the current ceasefire, signalling a potential easing of tensions in one of the world’s most critical energy corridors.
Fresh diplomatic signals from Tehran and Washington have raised cautious optimism about a potential deal to de-escalate tensions around the Strait of Hormuz and end the war.
Oil prices jumped above $100 a barrel again on Monday as the US Central Command said it will block ships from entering and exiting Iran ports via the Strait of Hormuz.
US President Donald Trump on Sunday announced that the US Navy would immediately begin blockading the Strait of Hormuz, sharply escalating tensions after marathon talks with Iran collapsed without a deal to end the war, leaving a fragile two-week ceasefire hanging in the balance.
Japan has instructed a national oil reserve storage site to prepare for a possible crude release after the Iran crisis disrupted Middle East supplies. Japan imports about 95 per cent of its crude from the region, much via the Strait of Hormuz.
The US will provide reinsurance covering up to $20 billion in potential losses in the Gulf region to bolster confidence among oil and gas shippers during the conflict with Iran, reported Reuters citing the US International Development Finance Corporation.
US President Donald Trump has said the US navy will protect ships in the Middle East and the government will provide insurance "if necessary" in a bid to contain soaring energy prices sparked by the US-Israel war with Iran.
The effective closure of the Strait of Hormuz following the outbreak of the Iran conflict, is likely to be temporary given its vital economic role. This, alongside global oil market oversupply, should limit oil price rises and mitigate any potential disruptions to Iranian oil supply, said an industry expert.
An oil tanker sailed through the Strait of Hormuz on Tuesday, heading to a United Arab Emirates port to load crude in a rare voyage since the Iran war severely disrupted shipping in the Middle East, according to industry sources and ship-tracking data quoted by Reuters.
Iran’s Revolutionary Guard Corps (IRGC) declared that the Strait of Hormuz was “closed” and that any vessel attempting to pass through the waterway would be set “ablaze.”
