Oil prices rose amid U.S. threats to impose a blockade on Iran
Oil prices rose slightly on Friday, August 14, after the United States threatened to continue its naval blockade of Iran indefinitely. This heightened concerns about potential disruptions to crude oil supplies.
Brent crude futures rose by 1 cent, or 0.1%, to $87.08 per barrel.
Meanwhile, U.S. West Texas Intermediate (WTI) crude rose 6 cents to $81.31 per barrel.
On Thursday, the United States stated that it could continue its naval blockade of Iran “indefinitely.”
Washington also plans to intensify economic pressure on Tehran as ceasefire negotiations have reached an impasse.
The prospect of a protracted conflict between the U.S. and Iran is causing concern in the oil market, as a prolonged war could limit supplies of “black gold.”
At the same time, the potential impact of geopolitical risks is partially offset by a downgrade in forecasts for oil demand growth.
This week, OPEC and the International Energy Agency lowered their expectations for the pace of demand growth in the global oil market.
In addition, official U.S. statistics showed the largest weekly increase in crude oil inventories in more than three and a half years.
Thus, the market is simultaneously reacting to the risk of a reduction in global supply due to the conflict surrounding Iran and to signals of weaker demand and a significant buildup of inventories in the U.S.
This was reported by Reuters.
Oil prices remain below $100 per barrel despite tensions surrounding the Strait of Hormuz and uncertainty regarding the volume of oil flows from the region. According to CNBC, prices rebounded by about $15 from their July lows, but at the time of this report’s publication, a barrel was trading at around $85.
As a reminder, oil prices rose by more than 1.5% during Asian trading, reaching their highest level in over six weeks. The market reacted to attacks by Yemeni Houthis on oil tankers in the Red Sea and a new wave of U.S. strikes against Iran.
Over the past few days, Iran had been secretly moving oil tankers through the Strait of Hormuz even before the United States reinstated its naval blockade of Iranian ports.
