Oil gains more ground after new Iran vows to burn ships passing through Strait of Hormuz
Oil prices added more gains on Tuesday after an Iranian official said his nation will “set fire to anyone who tries to pass through” the Strait of Hormuz as the conflict between his country and the US and Israel continues.
In afternoon trade in Asia, Brent crude was around 3.2% higher at more than $80 (£59.67) a barrel, while US-traded oil was up by about 2.6%.
It comes after oil and gas prices surged on Monday and as the US government is set to announce plans to deal with the rising cost of energy.
Asian stocks also continued to fall on Tuesday as investors weigh the impact of the conflict on the financial markets.
Speaking on state TV, Ebrahim Jabbari, who is an adviser to the Commander-in-Chief of Iran’s Islamic Revolutionary Guard Corps (IRGC), said ships “should not come to this region. They will certainly face a serious response from us.”
Shipping through the Strait of Hormuz is crucial to the global economy, with about 20% of the world’s oil and gas passing through it. But shipments have come to a halt after several vessels were attacked in recent days.
As well as pushing up prices on global energy markets, the conflict has triggered a rise in how much its costs to transport oil.
The cost of hiring a supertanker to move oil from the Middle East to China reached an all-time high on Monday of more than $400,000 (£298,300).
That is almost double what it was last week, according to data from the London Stock Exchange Group.
Crude oil prices could pass $100 a barrel if the disruption to shipments is prolonged, Srinivaasan Balakrishnan from risk research firm Avellon Intelligence said.
He predicted that if it held at that level US petrol prices could rise by up to 25 cents a gallon.
US President Trump is facing concerns that the conflict in the Middle East in the region could push up the cost of living.
Trump is scheduled to meet Treasury Secretary Scott Bessent and Energy Secretary Chris Wright on Tuesday.
Secretary of State Marco Rubio said Washington will announce plans to deal with rising energy prices.
“We knew that going in would be a factor,” Rubio told reporters of rising oil prices.
“Starting tomorrow you will see us rolling out those phases to try to mitigate against that.”
