Global crude oil prices extend rally amid US blockade fears on Iran

New Delhi: Global crude oil prices extended their upward momentum on Wednesday amid reports that the United States is likely to continue its blockade of Iranian ports, raising concerns over prolonged supply disruptions in the Middle East.

International oil benchmark Brent crude rose 0.63 per cent to $111.97 per barrel, while US West Texas Intermediate (WTI) crude gained 0.81 per cent to $100.74.

The rise was supported by reports that claim US President Donald Trump has asked aides to prepare for an extended blockade on Iran’s shipping and energy exports.

According to reports, the move is part of Washington’s broader effort to tighten economic pressure on Tehran by restricting maritime trade linked to its ports.

At the last count, Brent was trading at $111.12, down 0.13 per cent, while WTI was at $99.32, lower by 0.6 per cent.

On the Multi Commodity Exchange, crude oil traded lower, declining 0.88 per cent or Rs 84 to Rs 9,401.

The ongoing restrictions around the Strait of Hormuz — a key transit route for nearly one-fifth of global oil and LNG supplies — continue to support prices.

Earlier in April, US President Donald Trump announced a ceasefire between US-backed forces and Iran, though both sides are yet to reach a formal settlement. Iran has continued to curb shipping activity through the Strait, while the US blockade of Iranian ports remains in place.

The situation has added to uncertainty in global energy markets, particularly as negotiations over Iran’s nuclear programme and sanctions relief show limited progress.

“Even though there are important developments happening in the Gulf region, there is no solution to the energy crisis caused by the closure of the Strait of Hormuz. The UAE’s decision to quit OPEC might have a bearing on crude prices in the medium term, but it is unlikely to ease prices in the near term. There are indications that the US-Iran stand-off may continue much longer,” a market expert said.

“Brent crude at $110 is negative for India. As long as crude prices remain elevated, the downside risk to India’s growth and the upside risk to inflation will remain high,” the expert added.

IANS