Global oil prices on March 5 showed a sharp increase amid a direct military confrontation between the United States and Iran in the Indian Ocean. The price of Brent crude rose by 2.05% to $83.07 per barrel, while American WTI added 2.60%, reaching $76.60. This was reported by Reuters, writes UNN.
Details
The market instantly reacted to the destruction of an Iranian frigate by an American submarine off the coast of Sri Lanka and the US Senate's refusal to limit Donald Trump's military powers. The escalation of the conflict creates a critical threat of a complete closure of the Strait of Hormuz, through which more than 20% of the world's raw material consumption passes.
The destruction of an Iranian warship by a torpedo was the first such incident in many decades, confirming the transition of Operation "Epic Fury" into a phase of open hunting for the Iranian fleet. At the same time, in Washington, the Republican majority in the Senate rejected a resolution to limit the president's actions, effectively untying the hands of the Trump administration for further escalation without additional approvals from Congress.
Risks to global energy logistics
Oil traders fear an asymmetric response from Tehran, which could paralyze oil tanker traffic in the Persian Gulf. Despite the US having strategic reserves for several months, a protracted war is already putting pressure on quotes. Currently, the market is pricing in the likelihood of a prolonged blockade of key sea lanes, forcing global players to revise supply routes in favor of safer regions.
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