Oil surges as Donald Trump plans Strait of Hormuz blockade after US-Iran peace talks fail in Pakistan
Markets reacted swiftly after Donald Trump signalled a naval blockade of the Strait of Hormuz, a key global oil chokepoint, following failed US-Iran talks.
Benchmark oil prices surged in early Asian trade after US President Donald Trump said he would blockade the Strait of Hormuz to prevent any energy tankers from transiting the waterway bordered by Iran and Oman.
Brent Crude futures for May delivery jumped 8.7 per cent to $US104.80 a barrel and US WTI oil rose 7.4 per cent to $US104.22 a barrel, after prices fell last week on the back of Iran and the US agreeing to a 10-point peace plan for two weeks.
The move higher in oil also comes after talks between the US and Iran in Pakistan ended without a definite peace deal on Sunday.
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By continuing you agree to our Terms and Privacy Policy.“Trump said he would implement a full naval blockade of the Strait of Hormuz, stopping the trickle of vessels, primarily from China, that have been traversing the strait,” said ANZ Bank’s economics team.
“Iran responded by saying that the approach of any military vessels would be considered a breach of the ceasefire agreement. Markets are likely to react negatively today.”
Wall Street futures pointed to heavy losses at the opening bell in New York.
Gold prices fell 1.5 per cent to$US4676 an ounce and risk bellwether Bitcoin tumbled 3.5 per cent to $US70,725.
Australian share futures point to a higher open, although don’t account for the latest surge in oil prices and worries the US and Iran will not reach a permanent peace deal.
More to come...
