Oil Prices Surge to $103 after Trump Announces Iran Blockade
JAKARTA - World oil prices have jumped again after US President Donald Trump announced a naval blockade against Iran. According to Al Jazeera's report, quoted on Monday, April 13, Brent crude on Sunday rose more than 8 percent to reach US$103 per barrel, while Asian stock exchanges opened weak.
The spike comes after Trump declared the US Navy would block all ships entering and leaving the Strait of Hormuz. The statement came after a ceasefire negotiation between US and Iranian officials collapsed over the weekend.
However, a few hours later, US Central Command explained that the blockade only applies to ships heading to and from Iran. Other traffic is said not to be hindered. The blockade is scheduled to take effect Monday at 10.00 Eastern Time or 14.00 GMT.
The market reacted immediately. Al Jazeera reported that Brent broke through the psychological limit of US$100 per barrel for the first time since Tuesday, when prices had exceeded US$111. Oil movements have indeed been wild since the US-Israeli attack on Iran prompted Tehran to implement a de facto blockade in the Strait of Hormuz, a route through which about a fifth of the world's oil and gas supplies pass.
Last month, Brent briefly broke through $119 a barrel. Last week, it fell below $92 after the US and Iran announced a ceasefire two weeks after more than six weeks of war. But the calm was apparently thin.
Iran is still opening the route for a limited number of ships, with the condition of inspection and permission first. Even so, the shipping flow is far below normal conditions. The Windward maritime intelligence company recorded only 17 ships crossing the Strait of Hormuz on Saturday, whereas before the war it was an average of around 130 ships per day.
The impact was also immediately visible in the stock market. Japan's Nikkei 225 index fell 0.9 percent in morning trading, while South Korea's KOSPI weakened by more than 1 percent. US stock futures also fell, with S&P 500 futures down about 0.8 percent.