Oil prices cross $126 as Strait of Hormuz remains shut
What's the story
Oil prices have continued to rise, with West Texas Intermediate jumping 2.6% to $109.64 a barrel, gaining for the fourth day. Brent surged 7%, crossing the $126 a barrel mark. The increase is largely due to the ongoing conflict in Iran and the resulting near-closure of the vital Strait of Hormuz waterway. The situation has led to major disruptions in global markets and a significant spike in energy costs.
Stalemate
US naval blockade to remain in place: Trump
US President Donald Trump has said he won't lift the naval blockade of Iran's ports until a nuclear deal is reached with Tehran. The Strait of Hormuz has been effectively closed since the war broke out in late February, halting crude oil, natural gas, and petroleum product flows. This has further contributed to rising energy prices globally.
Strategic discussions
Trump discusses measures to maintain the blockade
On Tuesday, Trump discussed potential measures to maintain the blockade without heavily impacting American consumers. The talks were held with oil and trading executives, according to the White House. Meanwhile, Iranian officials have remained defiant amid these developments. Mohsen Rezaee, a military adviser to Iran's Supreme Leader, warned that the country would retaliate if the US blockade continues.
Accusations
IEA terms Middle East conflict as biggest supply shock
Iranian Parliament Speaker Mohammad Bagher Ghalibaf has accused Trump of trying to force Tehran into submission through economic pressure and internal divisions. The blockade by both the US and Iran has nearly halted daily transits through the Strait of Hormuz. The International Energy Agency has termed this Middle East conflict as the biggest supply shock in history, with a potential supply loss of around one billion barrels, according to Vitol Group.