Crude oil price: The already boiling crude oil prices — trading higher for eight sessions in a row — due to the ongoing US-Iran war, received a fresh fillip from the Energy Information Administration’s (EIA) latest data and reports that President Donald Trump has rejected a recent proposal from Iran to reopen the Strait.
Brent crude and US West Texas Intermediate (WTI) futures were up by over 7% on Wednesday, 29 April.
US crude rose 7.6% to $107.52 a barrel, and Brent rose to $119,54 per barrel, up 7.44% after the EIA, after the US oil stocks plummeted sharply and amid little signs of resolution to the Middle East crisis that’s entered its third month now.
This marks the fourth straight month of gains for crude oil prices, which are up 4% in April so far, building on the over 50% rally seen in March due to the onset of the US-Israeli war with Iran.
What’s driving crude oil prices?
The crude oil prices remain elevated due to the energy supply disruption through the Strait of Hormuz, a critical chokepoint accounting for 20% of global oil passage.
US President Trump reportedly told Axios he will not lift a naval blockade of Iran’s ports until he secures a deal with Tehran to address the country’s nuclear program, extending a standoff over the Strait of Hormuz that has caused a global energy crisis.
“The blockade is somewhat more effective than the bombing. They are choking like a stuffed pig. And it is going to be worse for them. They can’t have a nuclear weapon,” Trump was quoted as saying to Axios, suggested a Bloomberg report.
The blockade lies at the heart of the impasse, with the Islamic Republic insisting it won’t restart negotiations or reopen the Strait of Hormuz as long as the naval restrictions stay in place.
Meanwhile, oil prices surged after US oil stockpiles plunged last week due to surging global demand amid the war. Due to this, the United States has turned into a net crude exporter on a weekly basis for the first time on record, the Reuters report suggested.
Crude inventories fell by 6.2 million barrels to 459.5 million barrels in the week ended April 24, the EIA said, compared with analysts’ expectations in a Reuters poll for a 231,000-barrel draw.
(With inputs from Reuters)
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