Oil Holds Near One-Month High as US Restarts Iran Maritime Blockade
Summary
- International oil prices traded near a one-month high after the US resumed its maritime blockade of Iran.
- WTI and Brent crude traded near $80 and $85 a barrel, respectively, after jumping 11% at the start of the week.
- Vessel traffic has effectively halted as concerns over oil supply disruptions persist amid rising tensions in the Strait of Hormuz.
Forecast Trend Report by Period
International oil prices traded near a one-month high after the US resumed its maritime blockade of Iran.
Bloomberg reported on July 14 that West Texas Intermediate was trading near $80 a barrel. WTI has jumped about 11% in the first two trading days of this week. Brent settled near $85 a barrel a day earlier.
The US restarted its maritime blockade of Iran at 4 p.m. Eastern time on July 14. An hour before it took effect, the US also launched additional airstrikes aimed at weakening Iran's ability to attack merchant vessels.
President Donald Trump, however, withdrew a plan announced a day earlier to impose a 20% transit fee on cargo passing through the Strait of Hormuz.
Trump wrote on social media that the fee would be replaced by direct investment in the US from allied countries in the Gulf region. He did not specify the amount of investment or which countries would participate.
The reversal has eased some of the burden on the shipping industry. With the US-Iran ceasefire effectively over and tensions around the Strait of Hormuz rising again, the cancellation also removed fears of additional costs.
Concerns over oil supply disruptions remain. Vessel traffic through the Strait of Hormuz, which handles about 20% of global crude oil and liquefied natural gas shipments, has effectively come to a halt in recent days.
Scott Shelton, an energy specialist at TP ICAP, said there were too many uncertainties, including whether the situation amounted to war and whether the US could control the Strait of Hormuz well enough to guarantee passage for non-Iranian ships. For now, no vessels are passing through the strait normally.
Maritime shipping across the Middle East has contracted sharply as attacks on tankers continue. Yemen's Iran-backed Houthi rebels have also launched ballistic missiles and drones toward Saudi Arabia. That marks the biggest military escalation since the two sides agreed to a ceasefire in 2022.
