NEW YORK (AP) — Oil prices increased during early market trading on Sunday following the U.S. announcement of a blockade on Iranian ports starting Monday.
The price of U.S. crude oil surged by 8% to reach $104.24 per barrel, while Brent crude oil, the global benchmark, climbed 7% to $102.29.
The Iran conflict has led to significant fluctuations in Brent crude prices, which rose from approximately $70 per barrel before the war began in late February to over $119 at certain points. On Friday, prior to peace discussions, Brent for June delivery decreased by 0.8% to $95.20 per barrel.
Iran has been effectively managing the Strait of Hormuz, a crucial passageway for international oil shipping.
The U.S. Central Command stated that the blockade would be applied impartially to vessels from all nations entering or leaving Iranian ports and coastal regions.
It was also mentioned that ships traveling between non-Iranian ports would still be permitted to pass through the Strait of Hormuz.
Approximately a fifth of the world’s traded oil usually passes through the Strait of Hormuz daily. Major exporters in the region include Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, and Iran.
Even with the ceasefire in place, traffic in the Strait has been restricted. Marine trackers report that over 40 commercial ships have traversed the area since the ceasefire commenced.
