Crude oil prices crossed the $100-per-barrel threshold on Monday for the first time since July 23, as renewed US-Iran hostilities and growing risks to shipping through the Strait of Hormuz intensified concerns over global oil supplies. BusinessDay’s checks mid-Wednesday showed that Brent was trading at $100.6, West Texas Intermediate traded at $95.26. Meanwhile, Murban crude traded at $117.3.
The latest rally came after the United States struck three Iranian oil tankers over the weekend, escalating an already tense confrontation and raising the prospect of further disruption to oil shipments across the Middle East. US Central Command (Centcom) said the strikes on M/T Downy, M/T Stark 1 and M/T Kylo were carried out after Iran’s Islamic Revolutionary Guard Corps (IRGC) targeted two US warships with ballistic missiles.
Admiral Brad Cooper said the strikes were intended to impose a greater economic cost on Iran. “If you shoot at two of our ships, we will impose an even higher economic cost, taking out three of yours,” he said. The escalation has put the Strait of Hormuz, through which a significant share of global oil supplies normally passes, back at the centre of the market’s risk assessment.
Centcom said US forces had redirected 92 commercial vessels, disabled three and boarded two since its naval blockade of Iran resumed on July 14. Iran, meanwhile, continues to describe the Strait as completely closed to vessel traffic, raising the prospect of a prolonged disruption to regional energy flows. Mohammad Bagher Qalibaf, Iranian parliament speaker, warned that Tehran would respond more aggressively to further US attacks.
“The era of proportionate responses is now over,” Qalibaf said, warning that future Iranian retaliation would be “faster, heavier and more painful”. Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, separately said Iran would establish a new “exclusion zone” extending towards