Brent Crude Hits $115 as Trump Orders 'Extended' Iran Port Blockade
Brent crude oil prices climbed to approximately $115 a barrel on Wednesday, building on Tuesday's close of just over $110. The increase follows reports, originally in the Wall Street Journal, indicating that US President Donald Trump has ordered preparations for an extended blockade of Iranian ports.
Tehran has declared its intention to continue obstructing traffic in the Strait of Hormuz, a critical chokepoint for global oil and liquid natural gas shipments, in direct response to the US blockade. The Strait, which typically handles around a fifth of the world's supply, has faced severe restrictions since US and Israeli strikes commenced on 28 February.
Earlier this month, Iran issued a warning that any vessel approaching the Strait would be targeted, prompting the US to announce its forces would intercept or divert ships travelling to or from Iranian ports. Despite these measures, tracking data suggests at least four vessels from Iranian ports have successfully navigated the US blockade line.
Trump, in a Truth Social post, urged Iran to 'get smart soon' and agree to a deal, following persistent deadlock in efforts to resolve the ongoing conflict. US officials cited in the Wall Street Journal report suggested the President views an extended blockade as a less risky option compared to resuming bombing campaigns or disengaging from the conflict.
Iranian officials maintained on Tuesday that the country could withstand the blockade by utilising alternative trade routes. The World Bank concurrently forecasted a 24% surge in energy prices by 2026, reaching levels not seen since Russia's 2022 invasion of Ukraine, should the most acute disruptions from the Iran conflict cease by May.
European stock markets experienced declines on Wednesday as investors processed corporate earnings and awaited the US Federal Reserve's latest interest rate decision. The FTSE 100 dropped 0.76%, while the pan-European Stoxx index was down 0.4% at midday. Conversely, most Asian stock markets saw rises, continuing a recovery from the initial shock of the conflict.
