New Delhi, May 16 (IANS). Due to increasing tension between America and Iran, there was a sharp rise in global crude oil prices this week. At the end of trading on Friday, major benchmark crude contracts closed with gains of more than 3 percent.
The rising tensions have dimmed any hopes of a near-term solution to the Strait of Hormuz, one of the world’s most important oil transportation routes.
On Friday, Brent crude futures closed at $ 109.26 per barrel, up $ 3.54 or 3.35 percent. At the same time, American West Texas Intermediate (WTI) crude increased by $ 4.25 or 4.2 percent to reach $ 105.42 per barrel.
During the entire week, Brent crude increased by 7.84 percent and WTI increased by 10.48 percent. The market remained worried about the fragile ceasefire amid the Iran conflict and the possibility of disruption of global energy supplies.
Investors’ concerns increased further when Iran’s Foreign Minister Abbas Araqchi said that Tehran has ‘no confidence’ in America and Iran will talk only if Washington shows seriousness.
He also said that Iran is ready for both renewed conflict and diplomatic talks.
This statement came at a time when US President Donald Trump expressed displeasure over Iran and reiterated that Tehran cannot be allowed to develop nuclear weapons.
Trump also said that Iran should reopen the Strait of Hormuz. About 20 percent of the world’s oil and liquefied natural gas (LNG) supply passes through this route.
The strait is the main export route for Gulf countries like Saudi Arabia, Iraq and Qatar. Therefore, any kind of disruption in this is being considered a big concern for the global energy market.
The market had earlier hoped that the ceasefire between Iran and its rivals would normalize shipping movements in the region.
However, hopes for an early opening of the strait have diminished following recent rhetoric from Washington and Tehran, raising fears of long-term supply disruptions.
Donald Trump said during his visit to China that he had agreed with Chinese President Xi Jinping that Iran should not have nuclear weapons.
However, Xi Jinping did not comment publicly on the issue. China’s Foreign Ministry issued a statement saying the conflict “should never have happened” and “there is no reason for it to continue.”
The visit also saw a resurgence of tensions between the US and China, with Xi Jinping reportedly warning that bilateral relations could be at serious risk if the Taiwan issue is not resolved.
–IANS
DBP
