Brent crude oil prices have surged sharply as renewed hostilities in the Strait of Hormuz cast fresh doubt over the fragile ceasefire between Iran and the United States. The global oil benchmark rose by nearly 6 per cent on Monday to $114.44 per barrel before easing slightly on Tuesday morning to trade at $113.54 as of 02:00 GMT.
The latest spike came after the US military announced it had destroyed half a dozen Iranian small boats in response to alleged Iranian attacks on commercial vessels in the waterway. Iran rejected the claims and denied attacking the UAE.
Instead, IRGC officials claimed that an Iranian navy unit struck a US navy destroyer attempting to break the Hormuz blockade.
Analysts said prices are rising due to growing risks of supply chain disruptions, as both sides continue to show little flexibility in ongoing peace talks.
Despite US President Donald Trump’s announcement that American forces would “guide” commercial vessels through the critical strait, shipping companies remain hesitant to transit the waterway due to persistent safety concerns.
International Transport Workers’ Federation (ITF) General Secretary Stephen Cotton said ships should not be asked to cross the strait “without a full guarantee of safety".
“Freedom of navigation must be restored in full accordance with international law, but it must be done in a way that is coordinated, transparent and puts seafarers’ safety first,” Cotton said. “Until we have those assurances, we are calling on shipowners and flag states not to treat this announcement as a green light.”
According to the International Maritime Organisation (IMO), more than 20,000 sailors remain stranded on around 2,000 vessels currently stuck in the Strait of Hormuz.
Oil prices are expected to remain highly volatile in the coming months, with the possibility of crossing $150 per barrel if hostilities resume in full in the Strait of Hormuz.
Also read: Crude oil prices hover above $105 a barrel
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