Oil prices jump, markets shake amid US-Iran ceasefire uncertainty

NEW DELHI: Global energy prices surged on Monday as the Islamic Revolutionary Guard Corps announced the imminent closure of the Strait of Hormuz, citing a failure by the United States to adhere to ceasefire conditions. Monday morning saw Brent Crude rising by 4.72 per cent to $94.65 per barrel, while West Texas Intermediate (WTI) climbed 5.51 per cent to reach $88.47.

The volatility weighed on US equity expectations, with Dow Jones Futures dropping 367.44 points, or 0.74 per cent, in early trade. Gold prices softened slightly, trading at $4,807.93 per ounce.

In Asian markets, Japan’s Nikkei 225 rose 614.10 points, or 1.05 per cent, to reach 59,090.00. South Korea’s KOSPI added 1.32 per cent to 6,273.92, and the Taiwan Weighted index gained 413.85 points to trade at 37,218.19. In Hong Kong, the Hang Seng edged up 0.61 per cent to 26,321.00, while China’s Shanghai Composite recorded a 0.52 per cent increase. Conversely, Singapore’s Straits Times index saw a marginal decline of 0.06 per cent, according to market data.

Last Friday, Iran’s Revolutionary Guard announced that the Strait of Hormuz will remain closed from that evening, CNN reported. In a statement, the IRGC said several vessels passed through the Strait of Hormuz on Friday, but “due to the violation of the ceasefire conditions, the American enemy did not lift the naval blockade of Iranian vessels and ports”, according to CNN.

“Therefore, from this evening, the Strait of Hormuz will be closed until this blockade is lifted,” the statement read, as per CNN. “We warn that no vessel should move from its anchorage in the Persian Gulf and the Sea of Oman, and approaching the Strait of Hormuz will be considered cooperation with the enemy, and the violating vessel will be targeted”, the statement continued, as reported by CNN.

“Also, we inform all vessels and their owners to follow news only from the official IRGC Navy authority and through Channel 16, and the statements of the terrorist US president in the Strait of Hormuz and the Persian Gulf have no credibility”, it concluded, CNN reported.

Earlier, Iran said it would prioritise vessels that agree to pay fees for crossing the Strait of Hormuz, a senior Iranian official told CNN on Saturday, amid new restrictions on maritime traffic.

“Given the limitation on the number of vessels that will be allowed to pass, Iran has decided to give priority to those vessels that respond more quickly to the new Strait of Hormuz protocols and pay the costs of security and safety services,” the official said, according to CNN. “Vessels that do not pay the fees will have their passage postponed,” the official added.

The move came after Iran reimposed restrictions on ship movements through the Strait, citing “repeated breaches of trust” by the United States in the ceasefire implementation.

Earlier, US President Donald Trump warned Tehran after reports of renewed tensions over the Strait, saying Iran was no longer in a position to “blackmail” the United States. He said, “They (Iran) have no navy, no air force. They have no leaders; they have nothing… They can’t blackmail us.”

Separately, Iran said the Strait of Hormuz had returned to “strict management and control” by its armed forces after alleging US violations of earlier understandings and continued blockade of Iranian ports, according to state media IRIB. (ANI)