West Asia War: Oil prices surge as Strait of Hormuz tensions disrupt global supply

Representational image. File pic

Amid the ongoing global turmoil, oil prices rose on Monday, April 20. The hike in oil prices comes after a standoff between Iran and the US prevented tankers from using the Strait of Hormuz, the Persian Gulf waterway that is crucial to global energy supplies.

As per news agency AP, prices of US crude oil increased 6.4 per cent to USD 87.88 per barrel after trading resumed on the Chicago Mercantile Exchange. The price of Brent crude, the international standard, climbed 6.5 per cent to USD 96.25 per barrel.

The market reaction followed more than two days of growing hopes and dashed expectations involving the Strait. Iran, which effectively controls the passage, said Friday that it would fully reopen the passage off its coast to commercial traffic. Crude prices plunged more than 9 per cent on the news.

US Navy blockade to remain in effect

Tehran reversed its decision on Saturday, after President Donald Trump said a US Navy blockade of Iranian ports would remain in effect. Over the weekend, Iran's Revolutionary Guard fired on several vessels. Trump reported the forcible seizure of an Iranian-flagged cargo ship that tried to get around the blockade.

The US-Israeli war against Iran, now in its eighth week, has created one of the worst global energy crises in decades. Countries in Asia and Europe that import much of their oil from the Middle East have felt the most impact of halted supplies and production cuts, although rapidly rising gasoline, diesel and jet fuel prices are affecting businesses and consumers worldwide.

India summons Iran envoy over firing on Indian ships in Hormuz, urges safe passage for Indian vessels

The Ministry of External Affairs (MEA) on Saturday said that Iran's Ambassador to India, Mohammad Fathali, was called in for a meeting with Foreign Secretary Vikram Misri over the shooting incident involving Indian vessels in the Strait of Hormuz.

During the meeting, India conveyed deep concern over the incident involving two Indian-flagged ships - one of which is believed to be a Very Large Crude Carrier (VLCC) - that came under fire from gunboats of Iran's Islamic Revolutionary Guard Corps (IRGC), even though the tanker and crew are reported to be safe.

(With inputs from AFP)