Oil prices continued to rise Thursday, with Brent crude holding above $100 a barrel, a day after Iran targeted vessels attempting to cross the Strait of Hormuz in what it said was a response to U.S. strikes on Iranian oil tankers.
North Sea Brent crude, which crossed the $100 threshold on Wednesday for the first time since July, gained another 0.5% in early Asian trading Thursday, pushing it above $101.60 a barrel.
Meanwhile, President Donald Trump sought to rally his political base during a special Republican Party conference in Dallas, Texas.
“Right after the election, oil prices will come down,” Trump said at the conference.
The sharp rise in fuel prices and declining purchasing power in the United States and elsewhere around the world are expected to play a decisive role in the November midterm elections.
The latest increase in oil prices comes as talks to end the war that began with U.S.-Israeli strikes on Iran on February 20 have stalled.
Iran’s Islamic Revolutionary Guard Corps said Wednesday that it had attacked two U.S. vessels, eight oil tankers and 10 “non-compliant vessels” attempting to pass through the Strait of Hormuz.
Tehran said the attacks were carried out in response to U.S. strikes on five Iranian oil tankers on Tuesday, describing the action as “self-defense.”
In a move that could further complicate maritime traffic, the Revolutionary Guard announced an expansion of the “restricted zone,” which vessels are prohibited from entering without coordination with Tehran.
The United Kingdom Maritime Trade Operations (UKMTO) said Wednesday that “several commercial vessels in the northern Arabian Gulf and Gulf of Oman” had caught fire “as part of ongoing military activity in the region.”
Early Thursday, Iran’s official IRNA news agency reported hearing new explosions coming “from the direction of the sea.”
Impact on the Elections
Military confrontations between Iran and the United States continue in and around the Strait of Hormuz, even after a ceasefire agreement reached in April brought an end to the first campaign of intense bombardment.
The strategic strait has become the main flashpoint between Tehran and Washington since the war began. Iran insists on overseeing and managing maritime traffic through the strait, a position rejected by Washington.
Negotiations between Tehran and Washington have stalled as the two sides compete for control of the Strait of Hormuz, through which roughly one-fifth of the world’s oil and liquefied natural gas exports passed before the war began.
Iran has required vessels to obtain prior permission to transit the strait, a measure opposed by Washington and several countries in the region.
Washington responded by imposing a blockade on Iranian ports and has recently tightened economic sanctions on Iran and entities dealing with it.
Six months into the war, Trump said Wednesday that he believed it would end “right after” the November elections, saying, “I think the war will end right after the election,” because Iran “cannot hold out much longer.” He accused Tehran of trying to “influence” the election.
At the Republican Party conference that evening, Trump did not provide a timeline, saying only that fuel prices would fall “as soon as we win the war.”
However, The Wall Street Journal quoted U.S. officials as saying Trump’s senior advisers have privately warned that the war could continue throughout the remaining two years of his term.
The Revolutionary Guard had earlier said the war could end if Washington stopped threatening Iran and accepted several of its demands, including the withdrawal of Israeli forces from Lebanon, the release of billions of dollars in frozen Iranian assets, and “refraining from any interference in the country’s nuclear and ballistic capabilities.”
Amid years of tensions between Iran and Western countries over its nuclear program, the U.S.-based Center for Strategic and International Studies said construction activity had intensified over the past year at Mount Kolang in central Iran, which is suspected of housing an underground nuclear complex.
On Wednesday, the International Atomic Energy Agency’s Board of Governors voted to refer Tehran to the UN Security Council over what it described as Iran’s “non-compliance” with its nuclear obligations.
Source: AFP
