Hormuz Crisis Intensifies: Oil Prices Spike Amid Escalating Tensions
Oil prices surged on Tuesday as tensions between the US and Iran escalated over military strikes in West Asia. The Strait of Hormuz, a critical waterway for global oil shipments, saw a significant drop in traffic, with only five vessels passing through on Monday.
The price hike coincided with the release of details about a historic US-Venezuela oil deal, which grants the US majority control over 65 billion barrels of proven Venezuelan reserves. However, experts say this will not provide near-future relief to Americans.
US President Donald Trump hailed the agreement as the 'biggest oil deal in world history' and promised lower gas prices for Americans in the long term.
Brent futures rose $3.44 or 3.8% to $93.93 a barrel, while US West Texas Intermediate crude increased by $3.72 or 4.3% to $89.48. The international benchmark is expected to remain above $80 for the remainder of the year amid continuing shipping disruptions.
The US and Iran have been trading attacks since February 28, with the latest instances occurring on Tuesday. Trump warned that the US would 'hit them hard' in response to attacks on American military bases in the Gulf.