Trump Moves Oil Higher as Strait Of Hormuz Oil Prices Jump

Brent crude rose nearly 6 percent on Monday to $114.44 a barrel as strait of hormuz oil prices climbed on violence in the waterway. Two US-flagged merchant ships crossed the strait hours after Donald Trump said the United States military would guide commercial vessels through it.

Hormuz Trade Route Pressure

$114.44 a barrel is the level Brent reached as attacks in the Strait of Hormuz intensified. The US military said it destroyed six of Iran's small boats after attacks on commercial vessels, while an Iranian military source called the US account false.

Two US-flagged merchant ships crossed the strait after the Trump announcement, a small but immediate test of the new route guidance. Stephen Cotton, the International Transport Workers' Federation general secretary, said ships should not be asked to cross the strait without a full guarantee of safety.

20,000 Seafarers Stranded

Up to 20,000 seafarers remain stranded on some 2,000 vessels in the Strait of Hormuz, according to the International Maritime Organization. The agency said there is no precedent for so many seafarers being stranded in the modern age, and António Guterres has said the closure of the waterway is “impeding the delivery of oil, gas, fertiliser, and other critical commodities” and “strangling the global economy.”

Brent futures traded at $113.54 at 02:00 GMT on Tuesday morning, holding most of the day’s jump as the market kept pricing in damage risk, cargo backlogs and the possibility of mines slowing traffic. Brent prices have risen more than 50 percent since the war began in late February, leaving fuel buyers and shipping operators exposed to a route that remains open in practice but costly to trust.

Cotton said there was “little clarity” around the operation and that shipowners and flag states should not treat the announcement as a green light. “These workers have already endured weeks of fear, uncertainty and hardship. They must not now be put in harm’s way,” he said.