Oil and natural gas surge after Iran orders Strait of Hormuz closure
Crude oil prices fell on Tuesday after President Donald Trump said the United States would provide insurance to tankers passing through the Strait of Hormuz.
U.S. crude oil prices rose more than 2%, or $1.64, to $72.87 per barrel as of 2:49 PM ET, while global benchmark Brent also rose more than 2%, or $1.88, to $79.62 per barrel. Prices had risen more than 9% earlier in the session.
“Effective IMMEDIATELY, I have directed the United States Development Finance Corporation (DFC) to provide, at a very reasonable price, political risk insurance and guarantees for the Financial Security of ALL Merchant Marine traveling in the Gulf, especially Energy,” Trump said in a social media post. he said.
“If necessary, the US Navy will begin escorting tankers through the Strait of Hormuz as soon as possible,” the president said.
Oil prices rose this week as tanker traffic in the Bosphorus came to a halt. Approximately 20% of global oil consumption passes through the Bosphorus and exports are primarily to China, India, Japan and the South.
Wall Street commodity strategists have warned that oil prices could rise above $100 a barrel if the Strait remains closed for an extended period of time.
