Washington: Oil and natural gas prices climbed sharply as the war involving Iran raised fears about disruptions to the Strait of Hormuz, a key shipping corridor for global energy, prompting US President Donald Trump to move to reassure markets and protect tanker traffic.
Energy markets surged as investors grappled with the widening Middle East conflict and mounting threats to the narrow waterway through which roughly a fifth of the world’s oil and gas flows.
According to a report in The New York Times, the world’s main international oil benchmark rose about 5 per cent to around $81.40 a barrel, while natural gas prices also jumped amid fears that the conflict could disrupt supplies from the region.
Prices had surged earlier as traders worried that attacks involving US, Israel and Iran could threaten shipments through the Strait of Hormuz. But markets steadied later after Trump announced steps aimed at protecting shipping through the Gulf.
“Effective IMMEDIATELY, I have ordered the United States Development Finance Corporation (DFC) to provide, at a very reasonable price, political risk insurance and guarantees for the Financial Security of ALL Maritime Trade, especially Energy, traveling through the Gulf,” Trump said.
He said the protection would be extended broadly to shipping companies operating in the region.
“This will be available to all Shipping Lines,” the president said, adding that Washington was ready to take additional military measures if needed.
“If necessary, the United States Navy will begin escorting tankers through the Strait of Hormuz, as soon as possible.”
The announcement was aimed at reassuring energy markets and tanker operators worried about Iranian threats to shipping lanes. The New York Times reported that tensions have intensified around the strategic waterway, with an Iranian commander warning that ships attempting to transit the strait could face retaliation.
Trump sought to project confidence that the United States could prevent disruptions to global energy supplies despite the escalating conflict.
“No matter what, the United States will ensure the FREE FLOW of ENERGY to the WORLD,” he said.
Energy markets reacted quickly. According to CNBC, US crude prices rose about 4.68 per cent to $74.56 per barrel, while global benchmark Brent crude gained about 4.71 per cent to around $81.40 after the president’s announcement that Washington would provide insurance and protection for shipping through the Persian Gulf.
Analysts warned that the outlook could worsen if the Strait of Hormuz is disrupted for a prolonged period. CNBC reported that some market strategists believe oil prices could surge above $100 per barrel if tanker traffic through the waterway were blocked.
Trump acknowledged that the conflict could temporarily drive up energy costs.
“So if we have a little high oil prices for a little while, but as it drops, I believe, lower than even before,” he said while speaking to reporters during a meeting with German Chancellor Friedrich Merz at the White House.
The turmoil also rattled global financial markets. The New York Times reported that stock markets fell worldwide as investors reacted to the risks posed by the widening Middle East conflict.
The Strait of Hormuz, located between Iran and Oman, is one of the world’s most critical energy chokepoints, carrying a significant share of globally traded oil and liquefied natural gas. Any disruption there can quickly affect fuel prices, shipping costs and inflation worldwide.
India and other Asian economies are particularly sensitive to such shocks because they rely heavily on crude imports from the Gulf region, making stability in the shipping corridor crucial for energy security and economic stability.
(IANS)
