JAKARTA - World oil prices rose again on Tuesday after falling the day before. The rise was triggered by concerns that have not gone away: supplies are still disrupted because the Strait of Hormuz has not really recovered, while the United States allies have rejected Donald Trump's request to send warships to escort tankers on the route.
According to Arab News quoting Reuters, Tuesday, March 17, Brent crude rose 2.7 percent to US$102.95 per barrel. US crude, West Texas Intermediate (WTI), also rose 2.6 percent to US$95.95. In the previous session, Brent had fallen 2.8 percent and WTI fell 5.3 percent after several ships managed to pass through.
The problem is, the market is not calm. The Strait of Hormuz is an important route through which about 20 percent of the world's oil and liquefied natural gas trade passes. As long as this line is disrupted, the market immediately worries about supply dragging, energy costs rising, and inflation being pushed.
"The risk remains very real. It is enough for an Iranian militia to fire a missile or plant a mine on a tanker passing by to reheat the whole situation," IG market analyst Tony Sycamore said in a note quoted by Arab News.
A number of US allies on Monday rejected Donald Trump's request to send warships to escort the voyage through the Strait of Hormuz. The rejection triggered criticism from the US President, who accused Western partners of not knowing how to be grateful after decades of support.
"For now, the oil market is focused on the duration of the conflict, the interruption of supplies in Hormuz, and ultimately the damage this chaos will leave on oil infrastructure in the Gulf," said Priyanka Sachdeva, senior market analyst at Phillip Nova, also quoted from the same reference.
Pressure increased after a fire occurred in the Fujairah oil industrial area due to a drone attack. Reuters also reported that UAE oil production fell by more than half due to disruptions in Hormuz forcing the closure of a number of facilities.
As long as the Strait of Hormuz is not completely safe, oil prices will be difficult to calm.
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