Crude Prices Soar on Strait of Hormuz Tensions

Crude oil prices surged on Tuesday, reaching three-week highs, as tensions between the US and Iran continued to escalate over control of the Strait of Hormuz. The price of September WTI crude oil (CLU26) closed up 0.44% (+$1.25) to $241.62 per barrel, while September RBOB gasoline (RBU26) rose by 0.97% to $2.06 per gallon.

The Strait of Hormuz is a crucial waterway for oil shipments from the Middle East, and its closure or restriction would have significant implications for global energy markets. The US and Iran are engaged in a standoff over control of the strait, with President Trump stating that the US has 'total control' over it.

The situation was further complicated by the detention of a UAE-owned tanker by Iranian authorities in the Strait of Hormuz, which Iranian officials claimed was necessary to ensure the safe passage of ships through the waterway. The move is seen as an attempt by Iran to assert its control over the strait and undermine US influence in the region.

The International Energy Agency (IEA) warned that the global oil supply deficit will worsen, even as oil demand takes a hit from the war and high prices. The IEA expects global oil inventories to fall at twice the previously estimated rate in Q3 due to ongoing disruptions from the US-Iran conflict.