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Hormuz traffic stays low
Oil prices rose for a fourth consecutive day as tanker-tracking data showed further deterioration in traffic through the Strait of Hormuz, with Brent trading at $91.88 per barrel and West Texas Intermediate at $85.80 at the time of writing.
“Brent crude was trading at $91.88 per barrel at the time of writing”
CNN said the number of ships crossing the Strait of Hormuz rose 27% in the past week to 103 entering and 89 leaving, but that figure was still only 20% of the seven-day pre-war average.
Iran’s Foreign Ministry spokesperson Esmaeil Baghaei rejected U.S. President Donald Trump’s threat of an “economic D-Day,” calling it “a recipe for an abysmal return to full-scale classic colonialism.”
The BBC reported that the United States and Iran exchanged strikes for the first time in weeks after American forces attacked rocket-launching platforms on Hormuz Strait’s Larak Island, with Iran’s Revolutionary Guard saying the first known U.S. strikes since late July left two dead and two others injured.
The BBC also said Iran is currently demanding that oil tankers pass through Larak Island for inspection, and reports say it is forcing ships to pay $2 million (1.5 million pounds) to transit.
Threats, sanctions, and strikes
CNN reported that the Iranian Foreign Ministry warned that those who order or implement the levies “are liable to prosecution and punishment,” while it also quoted Baghaei calling Trump’s threat “a recipe for an abysmal return to full-scale classic colonialism.”
CNN said Trump had earlier threatened “the MOST CRUSHING ECONOMIC OPERATION” against Iran in a social media post on August 19, and that he vowed “tremendous economic consequences” for countries that do business with Tehran.
The BBC said CENTCOM described its operation as “limited and precise” after monitoring Iran’s apparent preparations to “launch missiles and lay sea mines in the Hormuz Strait,” and it added that Iran vowed “retaliation and punishment.”
Reuters reported that on Tuesday oil prices rose more than 2% as renewed fighting between the United States and Iran stoked fears of supply disruptions, with Brent crude futures up $2.17, or 2.4%, at $92.66 a barrel by 1302 GMT.
Reuters also said two supertankers carrying Saudi oil were struck by unknown projectiles within minutes of each other on Monday while crossing the Strait of Hormuz, and that the number of visible commodity vessels transiting the strait held at about five per day on Monday.
What’s at stake next
Reuters said mediators including Qatar and Oman to broker a deal to reopen the Strait of Hormuz have so far proven inconclusive, even though the strait “carried about a fifth of global oil and LNG supplies before the war erupted in late February.”
“carried about a fifth of global oil and LNG supplies before the war erupted in late February”
The BBC said the Strait of Hormuz has effectively been closed since the February start of the conflict, causing sharp volatility in global oil prices, and it described the waterway as a narrow passage between Iran and the United Arab Emirates and Oman, about 33 km (21 miles) wide at its narrowest point.
CNN said more than 80% of liquids transiting over the past two weeks have taken the Omani route, a UN-authorized shipping channel that Iran vehemently opposes, and it added that the number of ships crossing the strait remains at a trickle.
The Business News Nigeria report said the latest price increase came two days after the June ceasefire between Washington and Tehran broke down in early July, and it noted that Iran maintains the strategic waterway remains closed even after Trump declared it open.
Reuters warned that “Fresh hostilities between the U.S. and Iran raised concerns about prolonged disruptions to energy flows through the Strait of Hormuz,” while Saxo Bank analyst Ole Hansen said the market is betting on supply not being disrupted more than it is already.