After the US Central Command (CENTCOM) announced late Sunday night that their Navy would block ships coming from or going to Iran using the Strait of Hormuz, oil prices crossed $100 per barrel. The move from the US came after no deal was reached during the Islamabad talks, mediated by Pakistan, on Saturday.
“The blockade will be enforced impartially against vessels of all nations entering or departing Iranian ports and coastal areas, including all Iranian ports on the Arabian Gulf and Gulf of Oman. CENTCOM forces will not impede freedom of navigation for vessels transiting the Strait of Hormuz to and from non-Iranian ports,” read CENTCOM statement on X.
Brent crude futures rose $6.96, or 7.3%, to $102.16 a barrel by 0430 GMT, after settling 0.75% lower on Friday. U.S. West Texas Intermediate (WTI) crude was up $8.12, or 8.4%, at $104.69 a barrel, following a 1.33% loss in the previous session, according to Reuters.
US President Donald Trump warned of a long-lasting impact from the move, saying that oil and gasoline prices may remain high through November’s midterm elections.
CENTCOM forces will begin implementing a blockade on all maritime traffic entering and exiting Iranian ports at 10 a.m. ET (1400 GMT), or 7:30 p.m. IST, on Monday.
Iranian speaker takes a dig at US
Iranian Speaker Mohammad Bagher Ghalibaf, who took part in the Islamabad talks, shared news of the spike in oil prices due to the US blockade, but not without taking a dig at Washington. He posted an image showing increased gas prices at stations near the White House and wrote: “Enjoy the current pump figures. With the so-called ‘blockade’, you’ll soon be nostalgic for $4–$5 gas.”
Iran’s Revolutionary Guards said on Sunday that any military vessels attempting to approach the Strait of Hormuz would be considered a violation of the two-week U.S. ceasefire and would be dealt with harshly and decisively.
Despite the stalemate, three fully laden supertankers passed through the Strait of Hormuz on Saturday, shipping data showed. They appeared to be the first vessels to exit the Gulf since the ceasefire deal was struck last week, according to Reuters.
Blockade to affect energy supplies even more
If the blockade happens, it will affect the energy supplies even more badly in countries, including India, which are dependeng for oil and gas fro Iran and other Gulf nations. In his Parliament address, PM Narendra Modi had sent a message to the citizens to be ready for a challenging situation arising out of the West Asia conflict. Indian goverment has so far ensured there is no rise in the prices of petrol and diesel in India. The government has even said that there is no shortage of LPG in India, however, it has maintained that supply remains a big challenge.
