Oil prices have continued to rise since US President Donald Trump announced plans to impose shipping fees in the Strait of Hormuz and reimpose a blockade on Iranian ports, raising concerns about potential disruptions to global crude oil supplies and pushing prices to a 4-week high.
September-delivery futures for the global benchmark Brent crude rose 2.09%, recording $85 per barrel. Brent had posted a gain of 15% in less than two days, while August-delivery futures for US West Texas Intermediate rose 1.78% after opening trade up 3.34%.
Soni Kumari, analyst at ANZ, said: "Despite the signing of the memorandum of understanding and the reaching of an agreement, it did not even last a few weeks. This is the source of concern that the market is currently trying to factor in."
She added: "What we believe is that the peak of the escalation has passed, but there are upside risks for oil prices if these disruptions continue, which would keep prices in the $85 to $90 range. Shipping data showed the number of tankers transiting the Strait of Hormuz fell to its lowest level in two months during the past day."
Analysts at Gilber & Associates said in a note that President Trump's reimposition of restrictions on Iranian maritime traffic, alongside retaliatory attacks and the sharp drop in vessel transits through the strait, is exacerbating near-term supply availability concerns.
Analyst Giovanni Staunovo at UBS said: "The focus will remain on the number of tankers entering the strait, as a lower count could affect production, and so we are currently seeing a risk premium, but there are also disruption risks supporting prices. With the possibility of a prolonged supply disruption returning, analysts expect countries to seek ways to bypass the strait entirely and permanently."