Industry Odisha Bureau, Jul 14: The Oil prices climbed over 2 percent as fresh conflict broke out in the Middle East following move of the USA to reimpose its blockade of the Strait of Hormuz and begin charging a 20 percent fee on any cargo shipped through the vital waterway.
According to reports, the price for a barrel of Brent crude oil, the international standard, rose 2 percent to $85 after the United States and Iran each said the Strait of Hormuz is under its control.
Fighting in the region has kept oil tankers from using the strait to deliver crude to customers worldwide from the Persian Gulf, which drives up fuel prices worldwide.
Brent’s price jumped toward $85 immediately after President Donald Trump said he’s reinstating a blockade on Iranian ships in the strait.
He also called for 20 percent payments on all cargo shipped through it to reimburse the United States for providing protection in the area.
Brent crude futures for September delivery rose as much as 2.8 percent before trading 2.14 percent higher at $85.11 a barrel. US West Texas Intermediate crude for August delivery gained 2.27 percent to $79.91 a barrel, extending Monday’s rally of nearly 10 percent, the reports said.
Brent’s price, though, remains remain well below its wartime peak of nearly $120 per barrel for its most actively traded contract.
On Wall Street, the S&P 500 fell 0.7 percent, coming off its fourth winning week in the last five. The Dow Jones Industrial Average was down 121 points, or 0.2 percent, as of 2:05 p.m. Eastern time, and the Nasdaq composite was 1.4 percent lower.
Oil has now recovered to its highest level in almost a month after losing about 30 percent during the second quarter. Iran exported at least 57 million barrels of crude during the period between two U.S. naval blockades, underscoring the importance of the renewed restrictions for global oil supplies.
