Crude oil prices in the U.S. are marching higher amid ongoing tensions around the Strait of Hormuz, and with the current ceasefire between the U.S. and Iran on shaky ground.
The Strait of Hormuz, a vital shipping lane for about 20% of the world’s crude oil, remains effectively closed despite a ceasefire deal between the U.S., Israel and Iran.
Consequently, U.S. West Texas Intermediate (WTI) crude oil is up 2.2% on April 10 to $100.04 U.S. per barrel.
Brent crude oil, the international benchmark, is up 1.7% and trading at $97.59 U.S. a barrel.
U.S. President Donald Trump has warned Iran against charging oil tankers to safely transit the Strait of Hormuz, a move that risks undermining a two-week ceasefire agreement.
Shipping flows through the Strait remain severely restricted, keeping financial markets on edge.
Additionally, attacks on Saudi Arabia’s energy infrastructure have negatively impacted that country’s oil production.
The strikes have cut oil output capacity by 600,000 barrels per day and trimmed flows through the East-West Pipeline by roughly 700,000 barrels a day, according to Saudi Energy Ministry.
Iran’s strikes hit a pumping station along the East-West pipeline, according to a report from the state news agency. That pipeline transports crude oil from processing facilities to Red Sea export terminals.
Separate attacks on Saudi Arabia’s Manifa and Khurais oil fields and several refineries have cut the Kingdom’s production by roughly 600,000 barrels per day.
The U.S. reached a two-week ceasefire agreement with Iran earlier this week in exchange for Tehran allowing vessels to transit the Strait of Hormuz.
However, the United Arab Emirates said on April 9 that the waterway remains largely shut to shipping.
