Brent climbs as US tightens grip on Hormuz

The front-month ICE Brent contract has gained by $1.13/bbl on the day, to trade at $97.45/bbl at 09.00 GMT.

IMAGE: Oil storage tanks. Getty Images

Upward pressure:

Brent crude’s price is poised to end the week near $100/bbl as the Strait of Hormuz continues to remain closed indefinitely.

Earlier this week, the US Central Command (CENTCOM) said a blockade of Iranian ports has been fully implemented.

Iran reacted to the news with fresh threats of disrupting global shipping routes beyond the Strait of Hormuz, including the Persian Gulf, Gulf of Oman, and the Red Sea.

“Oil flows through the Strait of Hormuz remain largely cut off, which continues to tighten the oil market,” ING Bank’s head of commodities strategy Warren Patterson said.

Downward pressure:

US President Donald Trump said a deal between Washington and Tehran could be reached soon, capping some of Brent’s gains today.

Trump told reporters that Iran had agreed to a potential nuclear deal, signalling further rounds of talks between the two sides.

“We have a lot of agreement with Iran, and I think something is going to happen very positive,” Trump said.

“The futures market appears to be responding more to headlines over how the war may evolve, with hopes that we could see a resolution in the coming weeks,” Patterson added.

By Aparupa Mazumder

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