Oil Prices Soar Amid Prolonged Hormuz Disruptions
Oil prices surged by over 3% on Wednesday, reaching a one-month high due to concerns about prolonged disruptions in the Strait of Hormuz. The Brent contract for June rose $3.33 to $114.59 a barrel, while the US West Texas Intermediate (WTI) futures for June climbed $3.55 to $103.48 a barrel.
The increase is attributed to reports that the US will extend its blockade of Iranian ports, which would further restrict oil supply from the region. According to the Wall Street Journal, President Donald Trump has instructed aides to prepare for an extended blockade, citing officials' comments.
Analysts expect the continued disruptions in the Strait of Hormuz to push oil prices higher. Yang An, an analyst at Haitong Futures, stated, 'The recent rise in oil prices has been driven by the Strait blockade.' While some market participants anticipate a near-term impact from the United Arab Emirates' decision to quit OPEC, analysts do not expect significant changes.