Oil prices climbed above $100 a barrel on Thursday after Iran tightened restrictions around the Strait of Hormuz and reported attacks on vessels attempting to navigate the critical shipping route.
Brent crude, the international benchmark, traded at $101.28 a barrel in early Asian trading, after rising above $100 the previous day for the first time since July.
The surge followed reports from Iranian state media that the Islamic Revolutionary Guard Corps had attacked two US vessels, eight oil tankers and 10 “non-compliant vessels” attempting to pass through the strait.
The Strait of Hormuz carries about one-fifth of global oil supplies, making any disruption to traffic a major threat to international energy markets.
The British maritime monitor UKMTO said “several merchant vessels in the Northern Arabian Gulf and the Gulf of Oman” had been “subject to disabling fire as part of ongoing military activity in the region”.
Iran Expands Restricted Zone
Iran further tightened its control of the region on Wednesday by expanding a newly designated “prohibited zone” into parts of the Gulf of Oman and the Arabian Sea.
The Revolutionary Guards said vessels entering the area without prior coordination would face sanctions. Guards spokesman Hossein Mohebi said the exact coordinates of the restricted zone would be announced later.
Iran has maintained tight control over the Strait of Hormuz since the war with the United States began on February 28, with maritime traffic through the waterway virtually paralysed.
Tehran has required vessels seeking to use the strait to obtain permission and pay transit fees.
US President Donald Trump, however, said oil prices would fall “as soon as” the United States wins the war.
“Oil will be going down as soon as we win the war with Iran,” Trump told Republicans in Texas.
“We’re winning it. We control the Hormuz Strait,” he added, again suggesting that the waterway could be renamed the “Trump Strait”.
Trump also said on Wednesday that the conflict would end immediately after the November midterm elections, arguing that Iran “can’t hold out any longer”.
That assessment contrasts with warnings reportedly issued privately by some of his senior advisers. The Wall Street Journal quoted US officials as saying the war could continue through the remaining two years of Trump’s term.
Iran Sets Conditions For Ending War
Iran’s Revolutionary Guards said the conflict could end if Washington met a series of conditions, including demands linked to the wars in Lebanon and Yemen.
Mohebi said Washington must “refrain from renewed threats, withdraw the Israeli regime’s army from Lebanon, end the blockade of Yemen, release $24 billion in Iran’s frozen assets and refrain from any interference in the country’s nuclear and missile capabilities,” according to Fars news agency.
The Guards also said they had struck a US military base in Jordan in retaliation for US forces destroying five Iranian oil tankers a day earlier.
Jordan’s army said it intercepted 18 missiles fired at the kingdom.
Iran’s foreign ministry described the attack on its oil tankers as “an overt threat to regional and international peace and security”, warning that the strikes “increase the dangers of tensions in the region”.
The ministry said attacks on US military facilities in the region were carried out in “self-defence”.
The US military said it had been responding to an Iranian attack targeting an American warship, marking the second such incident in less than a week.
Nuclear Pressure Mounts
Diplomatic pressure on Tehran also intensified on Wednesday after the International Atomic Energy Agency’s board of governors voted to refer Iran to the UN Security Council over its nuclear “non-compliance”.
The resolution was adopted by 23 votes to three, with eight abstentions. Russia, China and Niger voted against the measure.
Iran’s representative to the UN nuclear watchdog rejected the resolution, saying it had been passed under US pressure and “has no basis and will not bring any results”.
Israeli Prime Minister Benjamin Netanyahu also maintained that Iran was nearing collapse.
“The main task is to bring down the terror regime in Iran. We are very close to that,” Netanyahu said during a visit to troops in southern Syria, where Israel has occupied what it describes as a “security zone”.
With the Strait of Hormuz remaining heavily restricted, the escalating military confrontation continues to expose global oil markets to the risk of further supply disruptions.
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