Oil prices surge as US-Iran tensions escalate
What's the story
Oil prices have surged amid conflicting statements from the US and Iran regarding de-escalation efforts. The ongoing confrontation has led to the near-total closure of the Strait of Hormuz, a major oil transit route, resulting in significant production losses and heightened fears of a global energy crisis. West Texas Intermediate (WTI) crude was hovering around $91 per barrel while Brent crude crossed $103 after a more than 2% drop on Wednesday.
Legislative move
Iran's parliament drafting bill to impose ship protection levy
Iran's parliament is reportedly working on a bill that would impose a levy in exchange for providing protection to ships traversing the Strait of Hormuz. The proposal, according to semi-official Fars news agency, is likely to be finalized next week. This comes as Tehran has rejected US overtures and set its own demands, including sovereign authority over the vital waterway.
Market impact
Global oil prices could see massive spike
The ongoing turmoil in the energy-rich Middle East is set to push the global crude benchmark toward its largest monthly increase since 1990. The near-total closure of Hormuz has led to millions of barrels of daily oil production losses, further driving up product prices. BlackRock Inc.'s president Rob Kapito warned investors may be underestimating the risks associated with this conflict, suggesting even an announcement of war's end could still see oil prices rise due to supply chain recovery times.