(RTTNews) – Extending the gains from yesterday’s session, crude oil prices have soared on Tuesday while investors awaited developments in mediatory efforts to end the U.S.-Iran conflict even as the U.S. attacked Iran for the 10th straight day, reinforcing supply concerns due to the Strait of Hormuz crisis.
WTI Crude Oil for August month delivery was last seen trading up by $1.77 (or 2.13%) at $85.00 per barrel.
The drop seen in shipping traffic across the Strait of Hormuz continues due to ongoing U.S. strikes on Iranian targets and Iran’s retaliatory attacks on gulf nations harboring U.S. bases.
According to Lloyd’s List Intelligence data, just 53 vessels transited in the week through July 20, down from 157 of the previous week. Specifically, tanker and gas carrier traffic, which transport most of the gulf crude oil and Liquefied Natural Gas, dropped to 30 crossings from 90.
Similarly, Kpler’s data showed that daily crossings fell to 16 on July 15 before dropping to single digits on July 16. Prior to July 15, nearly 20 vessels transited the seaway.
According to S&P Global MINT and S&P Global Commodities at Sea, just 40 vessels transited the strait between July 17 and July 19, averaging roughly 13 crossings a day. Weekly traffic through July 19 fell almost 50% from the previous week.
For the week ending July 19, traffic dropped to 127 transits, averaging at 18 ships per day indicating a nearly 50% decline from a recorded 248 transit over the previous week ending July 12.
After attacks by Iran on its neighbors over the weekend resulted in three deaths of U.S. servicemen, U.S. forces stepped up their retaliation. U.S. forces targeted military command centers, launch sites, and air defenses in Iran.
For a brief period, concerns over oil and energy supply from the gulf eased following the interim agreement that was signed on June 17 between the U.S. and Iran whereby both nations consented to halt attacks on each other.
Following the Memorandum of Understanding, Iran reopened the Strait of Hormuz, and the U.S. lifted its naval blockade on Iranian ports.
However, the conflict re-erupted after Iran began targeting ships transiting through the strait without coordinating with Iranian authorities, leading to U.S. forces targeting Iranian military capabilities.
Soon after U.S. attacks, Iran announced the closure of the Strait of Hormuz and the U.S. re-imposed the blockade on Iranian oil exports. Supply-related concerns benefitted crude oil prices.
In the U.S., the national average price for a gallon of gasoline runs around $4.00 after renewed U.S.-Iran tensions.
On Sunday, U.S. Secretary of State Marco Rubio stated that the U.S. is receiving indications that Iran is willing to negotiate while Iran confirmed getting recommendations to defuse the crisis. Reportedly, Qatar and Pakistan are working to de-escalate the tensions.
Today, Iran’s Interior Minister Eskandar Momeni is in Pakistan where he held separate meetings with Pakistan’s Prime Minister Shehbaz Sharif and Chief of Army Staff Field Marshal Asim Munir.
In addition to the U.S.-Iran crisis, the announcement by the Houthi militia yesterday of enforcing a maritime embargo against Saudi Arabia raised concerns.
Speaking in the Oval Office, U.S. President Donald Trump stated that the U.S. was prepared to act if the Houthis attempted to disrupt shipping traffic in the Red Sea.
The U.S. dollar index was last seen trading at 101.18, up by 0.23 (or 0.23%) today.
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