Oil Soars as US Announces Iran-Linked Ship Blockade in Hormuz
Oil prices surged after the US vowed to block ships passing through the Strait of Hormuz if they stop at Iranian ports or are headed there, raising the risk of energy supply disruptions in the region. Brent briefly rose as much as 9.1% and traded near $102 near the end of the session.
If effectively implemented, a blockade on Iran-linked shipping could potentially restrict the only sustainable flow of Persian Gulf oil during a war. At the same time, Tehran's threat to target ships and ports in response increases risks for other producers, widening risk premiums in the energy market.
With hours remaining before the blockade takes effect, the implementation mechanism remains unclear. The US military stated that additional details would be provided to sailors via official notification before the blockade begins, and urged sailors to monitor radio broadcasts.
This policy comes after weekend peace talks failed, weeks after the US temporarily lifted some sanctions on Iranian oil at sea to curb a price surge since the war began. "Iran has still managed to export nearly 2 million barrels per day since the conflict began," said UBS analyst Giovanni Staunovo, noting that an effective full blockade would disrupt Iranian exports and tighten the oil market.
U.S. Central Command stated that the blockade would begin at 10:00 a.m. New York time on Monday, and would not apply to other vessels that choose to continue transiting the contested waterway "at their own risk." For Iran, a military adviser to the supreme leader, Mohsen Rezaee, said his country "will not allow" such an embargo, while the Iranian armed forces asserted that ports in the Persian Gulf would not be safe if Iran were threatened. (gn)
Source: Newsmaker.id
