Hormuz Tensions Send Oil Prices Soaring Above $88 Per Barrel
The global oil market saw a significant surge in prices last week, rising above $88 per barrel. This increase of over five percent is attributed to ongoing tensions between the US and Iran, particularly regarding control of the Strait of Hormuz.
US President Donald Trump's vow to make the strategic waterway a US territory has added further uncertainty and geopolitical risk premium to oil prices. Despite diplomatic efforts, an agreement to reopen the Strait remains unresolved.
The prolonged conflict has disrupted tanker traffic, with the waterway handling about a fifth of global oil shipments before the war. The International Energy Agency (IEA) has sharply lowered its global oil supply outlook, expecting a deficit of 1.8 million barrels per day in the third quarter.