Oil continues to rise amid Trump's escalating rhetoric on Iran
Kyiv • UNN
Brent crude rose to $110.34 after US threats to destroy Tehran over the strait blockade. Iran rejected a ceasefire and continues the blockade.
Oil prices continued to rise on Tuesday as US President Donald Trump escalated his rhetoric against Iran, threatening tougher measures if the country did not open the Strait of Hormuz, a key transit point for the world's oil, UNN reports, citing Reuters.
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Brent crude futures rose 57 cents, or 0.5%, to $110.34 a barrel at the time of Reuters' writing, while US West Texas Intermediate crude futures rose $1.26, or 1.3%, to $113.67.
Trump threatened to unleash "hell" on Tehran if it did not comply with his demands to close the strait by 8:00 PM EDT on Tuesday. "They could be destroyed," Trump warned, promising further action if a deal was not reached.
In response to a US proposal, delivered through intermediary Pakistan, Tehran rejected a ceasefire and called for a definitive end to the war, and also rejected pressure to open the strait.
Iranian forces effectively closed the Strait of Hormuz after the start of US and Israeli attacks on February 28, blocking a waterway through which about 20% of the world's oil flows normally pass.
"Ahead of Trump's ultimatum, clock-watching is playing almost as important a role in oil markets as the fundamentals themselves," said Tim Waterer, chief market analyst at KCM Trade.
"The possibility of a ceasefire agreement is some counterweight and could trigger lower prices if it gains traction, but lingering supply concerns from the Hormuz bottleneck and damaged energy facilities are keeping prices at the lower end," he noted.
On Monday, Iran's Revolutionary Guard stopped two Qatari liquefied natural gas tankers and ordered them to remain in place without explanation, Reuters sources said. However, shipping data shows limited vessel movement through the strait last Thursday.
The UN Security Council is expected to vote on Tuesday on a resolution to protect commercial shipping in the Strait of Hormuz, but in a significantly watered-down form after veto-wielding China opposed the use of force, diplomats said.
Attacks in the region continued: explosions were heard in and around the Syrian capital Damascus on Tuesday, caused by Israel's interception of Iranian missiles, Syrian state television reported.
Saudi Arabia said on Tuesday it had intercepted and destroyed seven ballistic missiles launched towards the Eastern Region, with debris falling near energy facilities, according to the defense ministry.
The conflict has put pressure on global oil markets, with spot premiums for US WTI crude reaching record highs as Asian and European refiners scramble to secure replacement supplies amid disruptions from the Middle East.
Saudi Arabia's state oil company Aramco raised the official selling price of its Arab Light crude for Asia for May delivery, setting a record premium of $19.50 a barrel above the Oman/Dubai average.
Meanwhile, Russia said on Monday that drones attacked the Caspian Pipeline Consortium terminal on the Black Sea, which handles 1.5% of global oil supplies. Russia reported damage to loading infrastructure and storage tanks.
On Sunday, OPEC+ agreed to increase oil production quotas by 206,000 barrels per day in May, although this increase will be largely notional as key members are unable to ramp up production due to the closure of the strait, which limits exports.
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