“The recent rise in oil prices has been driven by the Strait blockade. If Trump is prepared to extend the blockade, supply disruptions would worsen further and continue to push oil prices higher,” said Yang An, an analyst at Haitong Futures.
Though there is a ceasefire in the US-Israeli war with Iran, the conflict remains deadlocked while the sides seek a formal end to the fighting, with Iran shutting shipping flows through the Strait of Hormuz, a conduit for about 20 percent of global oil and liquefied natural gas supplies, and the US blockading Iranian ports.
The US is pressing for an end to what it claims is Iran’s nuclear weapons programme while Iran is demanding some form of reparations from the latest round of fighting, an easing of economic sanctions and some form of control over the Strait of Hormuz.
The Hormuz shutdown is continuing to foster pulls from global inventories, with market sources saying late on Tuesday the American Petroleum Institute reported US crude oil inventories fell for a second week.
Crude stocks fell by 1.79 million barrels in the week ended April 24, the sources said. Gasoline inventories fell by 8.47 million barrels, while distillate inventories fell by 2.60 million barrels.
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