Oil rises US$2 as Iran announces closure of Hormuz following US strikes
Global oil consumption is roughly 100 million barrels per day
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OIL prices climbed more than US$2 a barrel Thursday (Jun 11) as Iran declared the critical energy chokepoint, the Strait of Hormuz, closed after the US launched additional strikes against Iran.
Brent futures rose US$2.30, or 2.47 per cent, to US$95.40 a barrel, while US West Texas Intermediate (WTI) crude climbed US$2.60, or 2.89 per cent, to US$92.63. US crude futures gained more than US$3 earlier in the session.
Iran’s top joint military command announced the closure of the Strait of Hormuz on Thursday, including oil tankers and commercial ships, saying any vessel that will attempt passage will be shot at.
However, the US military said on X that commercial ships continue to transit in and out of the strait.
It also said no US warships have been struck in the strait, after Iran’s state media reported US ships near the waterway were targeted by missiles and drones.
US forces began launching additional strikes against multiple targets in Iran at 5.15 pm EDT (5.15 am in Singapore on Thursday), the latest in an escalating exchange of attacks that threaten to reignite a full-scale war, which was paused in early April when the two sides agreed to a fragile ceasefire.
Iran’s months-long blockade of the strait, which normally carries a fifth of the global oil and gas shipments, have kept oil prices elevated.
Separately, US crude inventories fell by 7.2 million barrels to 426.5 million barrels in the week ended Jun 5, the US Energy Information Administration said on Wednesday, compared with analysts’ expectations in a Reuters poll for a 4 million-barrel draw.
US crude inventories, including those from strategic reserves, have fallen by 79 million barrels since the Iran war began on Feb 28, as the world’s largest producer stepped into fill supply gaps left by the effective closure of the strait. REUTERS
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