Oil prices rise after ships attacked near Strait of Hormuz

What’s Happening

So basically The experts have warned that a prolonged conflict could push global energy prices even higher.

Oil prices rise after ships attacked near Strait of Hormuz 5 hours ago Save Daniel Thomas , Ben Hatton and Peter Hoskins Save File photo of shipping in the Strait of Hormuz, which has now ground to a halt Global oil prices have risen after at least three ships were attacked near the Strait of Hormuz, as Iran continues to launch strikes across the Middle East in response to ongoing attacks and Israel. Two vessels have been struck, and an “unknown projectile” was reported to have “exploded in close proximity” to a third, the UK Maritime Trade Operations Centre (UKMTO) dropped. (plot twist fr)

Iran has warned ships not to pass through the strait, which carries about 20% of the worlds oil and gas.

The Details

International shipping has almost come to a standstill at the straits entrance, with analysts warning that a prolonged conflict could push energy prices even higher. In early trade in Asia on Monday, global oil prices jumped 10% before those gains eased during the morning.

At 02:00 GMT, Brent crude was more than 4% higher at $76. 53) a barrel, while US-traded oil was also up by around 4% at $69.

Why This Matters

“The market isnt panicking”, Saul Kavonic, head of energy research at MST Marquee told the BBC. “There is more clarity that so far, oil transport and production infrastructure hasnt been a primary target ,” he added. “The market will be watching for signs that traffic through the Strait of Hormuz returns, which would see oil prices subside again.

The business implications here could be significant in the coming months.

Key Takeaways

• ” But some analysts have warned it could go over $100 in the event of a prolonged conflict.
• Edmund King, president of the AA, warned the disruption could drive up petrol prices around the world.

The Bottom Line

On Sunday, the Opec+ group of oil producing nations - which includes Saudi Arabia and Russia - agreed to increase their output by 206,000 barrels a day to help cushion any price rises, but some the experts doubt this would help much. Edmund King, president of the AA, warned the disruption could drive up petrol prices around the world.

What’s your take on this whole situation?