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.”
Global oil and gas prices surged on Tuesday as the escalating U.S.-Israeli war with Iran disrupted energy exports from the Middle East, triggering supply fears and sending shockwaves through commodity markets.
The risk of an expanded Iran war grew as Yemen's Iran-aligned Houthis on Saturday launched their first attacks on Israel since the start of the conflict, as additional US forces reached the Middle East. The first of two contingents of Marines arrived on an amphibious assault ship.
