Crude oil jumps 40% amid post-ceasefire uncertainty

WASHINGTON: The global oil market has come under severe pressure after clashes between the US and Iran in the Strait of Hormuz, which has seen a significant increase in crude oil prices.

On the other hand, global stock markets have also fallen, with the price of international benchmark Brent crude oil rising by 7.5% during a volatile trading session on Thursday, but it saw some decline when Asian markets opened.

Brent was at $101.12 a barrel at 03:00 GMT on Friday, below the day’s high of $103.70.

The increase came as US and Iranian forces exchanged fire in the Strait of Hormuz, a key shipping route for about a fifth of the world’s oil and gas.

The tensions come at a time when a temporary ceasefire was announced between the two countries on April 7.

According to the US Central Command, US forces retaliated after three US warships were attacked by Iranian missiles, drones, and small boats.

On the other hand, Iran’s Khatam al-Anbiya Command Center has accused the US of violating the ceasefire by targeting an Iranian oil tanker and other ships.

Iran further claimed that the US attacks also damaged civilian areas, including Qeshm Island.

US President Donald Trump dismissed the clashes as minor, saying that the ceasefire was still in place, while Iranian state media reported that the situation had returned to normal.

Meanwhile, shipping activities in the Strait of Hormuz have been almost suspended since late February, as fears of Iranian attacks threaten the movement of large oil tankers.

Globally, Brent oil prices have increased by about 40 percent compared to before the war, which is also estimated to have reduced daily production by 14.5 million barrels.

Asian stock markets, on the other hand, remained bearish on Friday, with Japan’s Nikkei 225, South Korea’s Kospi and Hong Kong’s Hang Seng Index all down more than 1%.

On Wall Street, the S&P 500 Index also fell 0.4%, despite hitting a record high a day earlier.

Petrol prices are reportedly going to be increased by Rs4.75 per liter in the next round of fuel prices; however, there will probably not be an increase in the price of high-speed diesel (HSD).