Chaos in Hormuz, oil prices “soar” / What is happening to the markets

Brent oil rises by nearly 6 percent as tensions in the maritime corridor push the ceasefire toward collapse

Oil prices have surged significantly as violence in the Strait of Hormuz has raised doubts over the fragile ceasefire between the United States and Iran.

Brent crude, the global benchmark for oil prices, rose by nearly 6 percent on Monday, reaching $114.44 per barrel.

Brent futures eased slightly on Tuesday morning, trading at $113.54 per barrel at 02:00 GMT, reports Al Jazeera.

The latest price increase came after the U.S. military said it had destroyed six small Iranian vessels in response to Iranian attacks on commercial ships in the waterway. The United Arab Emirates also reported being targeted by Iranian missiles and drones.

An Iranian military source, cited by the official IRNA agency, denied that U.S. forces had sunk any Iranian boats and described the American claim as “false.”

According to June Goh, a senior oil market analyst at Sparta in Singapore, the market is reflecting the risk of further damage to oil infrastructure and the possibility that the Strait of Hormuz could remain closed longer than anticipated by the Trump administration.

Despite U.S. President Donald Trump’s announcement that the American military would “lead” commercial vessels through the strategic strait, shipping companies have shown reluctance to use it due to ongoing security concerns.

While the U.S. military said that two American-flagged commercial ships passed through the strait in the hours following the launch of “Project Freedom,” there are still no signs of a significant return of maritime traffic in the region.

On Monday, the head of the International Transport Workers’ Federation (ITF), Stephen Cotton, stated that ships should not be asked to transit the strait “without a full guarantee of safety.”

“Freedom of navigation must be restored in full accordance with international law, but this must be done in a coordinated, transparent manner, with seafarers’ safety placed first,” Cotton told Al Jazeera. He added that there is “little clarity” on how the operation would ensure safe evacuation and that there are no guarantees from Iran for safe passage.

“Until we have these guarantees, we urge shipowners and flag states not to treat this announcement as a green light,” he said.

“These workers have already endured weeks of fear, uncertainty, and hardship. They should not be put at risk.”

According to the International Maritime Organization (IMO), up to 20,000 seafarers remain stranded on around 2,000 ships in the Strait of Hormuz. The IMO stressed that “there is no precedent in modern times for so many seafarers being trapped.”

Meanwhile, the United Nations has called for ensuring freedom of navigation in the strait, warning that its closure is disrupting the supply of oil, gas, fertilizers, and other critical goods, and is “strangling the global economy.”

Brent oil prices have risen by more than 50 percent since the start of the war in late February, amid an estimated production shortfall of 14.5 million barrels per day.

Analysts estimate that even if Washington and Tehran reach an agreement to end the war, oil prices will remain elevated for some time due to unprocessed cargoes, damage to regional infrastructure, and the need to clear Iranian naval mines.

Goh said she expects prices to rise further as countries draw on their energy reserves.

“As more reports emerge on OECD inventories showing high rates of stock drawdowns, a stronger upward trend for Brent oil prices is expected,” she said.

“KORÇA BOOM”