Oil and gas prices jump as Middle East conflict threatens to escalate
Oil and gas prices climbed sharply on Monday morning as the conflict between the United States and Iran threatened to escalate further, following new incidents in the Strait of Hormuz. The brief optimism that followed the reopening of the strait on Friday, which had sent oil prices sharply lower, quickly evaporated.
Oil prices jumped by over 7 per cent in the early hours of Monday morning, before easing off somewhat later on. At 7:00 on Monday, the price of Brent crude oil, the international benchmark for oil prices, hovered around 95 US dollars. Meanwhile, the European gas price stood at 41.7 euros per megawatt hour, up around 6.8 per cent compared to Friday.
The Strait of Hormuz has been closed again since Saturday, when the Iranian regime announced it would close the vital waterway in response to the ongoing US blockade of Iranian ports. Several tankers carrying LNG from Qatar have set sail for the strait in recent days, but ultimately stopped or turned back.
Ceasefire under threat
The US blockade has escalated tensions in the region. Over the weekend, US president Donald Trump announced that the navy had fired on the Iranian vessel Touska after it refused to stop. The ship is reportedly subject to sanctions imposed by the US Treasury Department. The US later boarded and seized the ship.
Trump also indicated he might not extend the ceasefire with Iran beyond its Wednesday expiry date, threatening strikes on Iranian power stations and bridges if no agreement is reached. In response, the Iranian military threatened to take retaliatory measures in the near future, accused the US of violating the temporary ceasefire.
A diplomatic solution to the conflict, meanwhile, appears out of reach. Iran has rejected a second round of negotiations with the US in Pakistan, the official Iranian news agency IRNA reported on Sunday evening. Trump had earlier announced a second round of talks in Pakistan on Monday.
Tehran argues that Washington's excessive demands, its constant shifts in position and the ongoing naval blockade of Iranian ports offer "no promising prospect for serious negotiations". Iranian officials also dismissed the second round of talks in Pakistan as part of an American media campaign aimed at exerting additional pressure on Tehran.
The Greek-flagged crude oil tanker Asahi Princess off the coast of the Syrian Baniyas port refinery © PHOTO BAKR ALKASEM / AFP
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