Trump says US seized Iranian ship in Strait of Hormuz, says delegation will head to Pakistan for second round of negotiations; Tehran rejects US peace talks
Oil and natural gas prices rose after the US Navy seized an Iranian ship during a chaotic weekend in which Tehran opened fire on ships and reimposed controls in the Strait of Hormuz.
Brent rose as much as 7.9 percent after the announcement of the reopening of the important waterway on Friday, while US oil rose 7.2 percent. European gas increased by 11 percent. Tehran (AEST) on Sunday closed the chokepoint again after the US said its blockade of Iran-linked ships violated a ceasefire agreement that expired this week.
President Donald Trump said that the US Navy, which did not comply with stop warnings while leaving Hormuz, the first major encounter of the week-long blockade, opened fire on the ship in the Gulf of Oman and seized the ship. The incident came hours after a back-and-forth over possible peace talks in Islamabad, with Trump saying he saw a chance of a deal and the Iranians saying there was “no clear possibility” of a deal.
“The market still has a risk premium going into the deadline, but it can’t fully commit to it yet,” said Haris Khurshid, chief investment officer at Karobaar Capital LP in Chicago. “If things continue like this, you will probably see a gradual increase to $105. [$147] Up to $115, but there’s a lot of back and forth in the headlines.
Tensions over Hormuz, through which about a fifth of the world’s oil and liquefied natural gas flowed before the U.S.-Israeli war against Iran began in late February, threaten to deepen the global energy crisis and undermine Trump’s weekend prediction of a quick end to the conflict. The waterway is just one of many unresolved issues that also include Iran’s nuclear capability and Israel’s ongoing occupation of Lebanon.
Bloomberg
