US Threatens Iran Blockade, Sending Oil Prices Soaring

Oil prices are on track for weekly gains after the US threatened an indefinite naval blockade of Iran, raising concerns about disruptions to crude supplies from the Middle East.

The US Treasury Secretary said that the country will apply measures like never before in economic isolation of a country, while shipping traffic through the Strait of Hormuz has fallen below its monthly average.

The Strait is crucial for global oil and liquefied natural gas supplies, with Brent futures rising 12 cents to $87.19 a barrel and US West Texas Intermediate crude futures up 50 cents to $81.75 a barrel.

Analysts note that higher oil prices are a result of the US approach, which implies little hope of a near-term resolution in the Middle East.