📰 Oil Price Surges Above $118 Amid Extended Iran Blockade Reports
Brent crude briefly hit $119 (£88) a barrel on Wednesday evening, marking the highest price so far this month with a near 7% single-day surge. The spike came amid separate reports that President Donald Trump has instructed aides to prepare to extend the ongoing blockade of Iran’s ports, in an effort to squeeze the country’s economy.
The BBC understands that energy executives, including Chevron CEO Mike Wirth, met with President Trump at the White House on Tuesday to discuss how to limit the fallout from the Middle East conflict on American consumers. Topics discussed included domestic energy production, progress in Venezuela, oil futures, natural gas, and shipping, according to a White House official who described the meeting as part of the President’s regular consultations with the energy industry.
Oil traders interpreted the meeting as a signal that the effective closure of the Strait of Hormuz will continue for a prolonged period. The key waterway — which typically carries about a fifth of the world’s oil and liquefied natural gas supply — has been effectively shut for weeks following US and Israeli strikes that began on February 28.
Iran has severely restricted shipping through the strait and warned earlier this month that any vessel approaching would be targeted. In response, US forces announced they would intercept or turn back vessels travelling to or from Iranian ports. Analysis by BBC Verify shows that at least four vessels tracked from Iranian ports appear to have crossed the US blockade line.
Despite recent fluctuations, oil prices remain far above pre-conflict levels. Brent crude dropped to $90 a barrel on April 17 following a ceasefire announcement between Israel and Lebanon, and after the US said it would pause attacks on Iran on April 8. However, the benchmark has been climbing steadily over the past 12 days as the US continued its blockade.
Lindsay James, investment strategist at Quilter, noted that the war’s impact in the UK has so far been largely limited to higher petrol and diesel prices. However, she warned that “every day that passes without a resumption of supply sees the risk of physical shortages and steeper price rises on a range of goods increasing.”
Iran’s economy is facing a deepening crisis. The annual inflation rate has risen to 53.7%, according to the Statistical Center of Iran, while the rial has fallen to a record low. The Iranian government said last week that approximately two million Iranians have lost their jobs, directly or indirectly, as a result of the war.
Source: BBC News