At the opening of trading on 31/3, Brent crude prices rose 2% compared to yesterday. WTI crude also climbed to nearly 106 USD per barrel, its highest level since 9/3.
Iran's closure of the Strait of Hormuz, a vital artery for global energy, pushed Brent crude prices up by 59% in March, marking its highest monthly increase ever. WTI crude also surged 58% this month, its largest gain since 5/2020.
Kuwait News Agency (KUNA) highlighted the threat of Middle East conflict to energy supply shipping lanes. The agency reported that the 2 million-barrel oil tanker Al Salmi was attacked at Dubai port, also warning of potential oil spills in the region.
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The crude oil tanker Eagle San Juan unloads at Cnergyico's Single Point Mooring (SPM) offshore terminal, near the Hub coast in Balochistan, Pakistan, on 18/3. *Photo: Reuters*
Last weekend, Iran-backed Houthi forces in Yemen launched missile attacks on Israel, raising concerns about potential renewed disruptions to the Bab el-Mandeb Strait. This strait connects the Red Sea and the Gulf of Aden, serving as a critical route for vessels traveling between Asia and Europe via the Suez Canal.
"If Houthi forces succeed in re-blockading the Bab al-Mandab Strait, both of the world's most vital energy shipping routes will face pressure," said Tim Waterer, a market analyst at KCM Trade.
Saudi Arabia rerouted its crude oil exports through this route, with volumes reaching nearly 4,7 million barrels per day last week, a sharp increase from the average of 770.000 barrels in the first two months of the year.
US President Donald Trump warned on 30/3 that the US would destroy Iran's energy facilities and oil wells if Tehran did not reopen the Strait of Hormuz. This warning followed Tehran's rejection of US peace proposals as "unrealistic" and its missile attacks on Israel.
However, the White House stated that negotiations with Iran were progressing well, adding that Tehran's public statements differed significantly from what it conveyed privately to US officials.
Meanwhile, Edward Meir, an analyst at financial services firm Marex, noted that the market had yet to find any resolution to the conflict. The conditions set by both sides remain far apart, despite the optimistic picture painted by Mr. Trump.
Bao Bao (according to Reuters)
