Oil prices climb on fears of US-Iran confrontations in Strait of Hormuz đš
Oil prices are moving higher on renewed concerns about the safety of transiting the Strait of Hormuz after Iranâs navy claimed it had prevented two US ships from entering the waterway.
Brent crude, the global oil benchmark, is up 3.8% to $112.3 a barrel. WTI, the US benchmark, is up a similar margin to $105.6 a barrel. (For context, oil is traded as a futures contract, which means an agreement to buy or sell at a specified price on a future date. Mondayâs WTI price reflects oil for delivery in June, whereas Brent reflects oil for delivery in July.)
Oil prices dipped briefly earlier on Monday, after the White House announced a plan to guide boats out of the Strait of Hormuz. US Central Command said it would âsupport merchant vessels seeking to freely transit through the essential international trade corridor.â
However, skepticism remains about whether a US naval escort will be sufficient to get oil tankers transiting the strait in large numbers. At least for now, crude oil prices reflect ânot just disruption, but the risk that disruption lingers,â according to Stephen Innes, managing partner at SPI Asset Management. âWashington and Tehran are locked in a stare-down that feels less like diplomacy and more like two central banks daring each other to flinch,â he wrote in a note Monday.
Meanwhile, US stock futures point to a modestly weaker open, with major stock indexes also lower in Paris and Frankfurt. In Asia, South Koreaâs Kospi closed 5% higher Monday on a rally in semiconductor companies. Stock markets in Japan, China and the United Kingdom are closed today for public holidays.