Iran-US Tensions Spark Oil Price Rally
Oil prices rose on Friday as tensions between the US and Iran flared up again after the Strait of Hormuz attacks. The incident has led to a resumption of oil gains, with Brent rising by 1 cent to $87.08 per barrel and West Texas Intermediate increasing by 6 cents to $81.31 per barrel.
The four Middle Eastern countries - Qatar, Kuwait, Egypt, and Bahrain - have condemned the Iranian attack on two tankers affiliated with the UAE as they transited the Strait of Hormuz. They declared full solidarity and rejected Iran's claim of control over the Hormuz.
Washington's strategy against Iran has been viewed by some as potentially leading to the country's military regime devolving into chaos. The US warned it could maintain a naval blockade of Iran indefinitely and increase economic pressure against Tehran, following stalled ceasefire talks.
US Treasury Secretary Scott Bessent announced that the country would apply measures 'like have never been seen in the history of economic isolation of a country.' However, some analysts are pessimistic about the return to normal flows out of the Strait of Hormuz, with SEB Research analyst Bjarne Schieldrop stating that 'a return to normal flows out of the Strait of Hormuz is now suddenly without any near-term hopes.'