Oil prices climb past $105 a barrel as war in Iran enters third week
By Auzinea Bacon, David Goldman, CNN
(CNN) — The price of oil rose to its highest level since July 2022 Sunday evening as the Trump administration suggested the war with Iran could last several more weeks and President Donald Trump called on the international community for help reopening the Strait of Hormuz to oil tankers.
Brent crude, the global benchmark, rose 2.9% to about $106.12 a barrel. US oil rose 2.6% to $101.53.
The US and Israel-led war in Iran has now entered its third week, causing the biggest oil disruption in history. The Strait of Hormuz, the vital waterway controlled by Iran, has been effectively shut for oil tankers to pass through since the start of the war. About 20% of the world’s oil supply flows through the chokepoint.
The Trump administration has repeatedly tried to assuage concerns about shipping flows. Trump has said that the US will send naval forces to escort and protect oil tankers as they travel out of the Middle East. But the administration has recently conceded that it could take weeks before the Navy is prepared to begin that endeavor.
Trump on Saturday in a Truth Social post asked other countries to help coordinate a reopening of the strati to restore the flow of oil, “so that everything goes quickly, smoothly, and well.”
Oil prices tend to be more volatile in after-hours trading, as speculators hedge positions when volume is lower. Last Sunday, oil nearly hit $120 a barrel before settling near $100 during the day on Monday.
Trump added on Saturday in a Truth Social post that the US will coordinate with other countries in the region to restore the flow of oil, “so that everything goes quickly, smoothly, and well.”
But Iran has ramped up pressure, including laying mines in the strait and saying it will strike any US-linked oil and gas infrastructure. And tankers have been struck in the Strait of Hormuz since the start of the war on February 28.
The United States has also bombarded Kharg Island, home to most of Iran’s oil production. But the Trump administration said it has spared Iran’s oil production for now.
Also over the weekend, the administration made several efforts to expand US production to counteract rising fuel prices. On Saturday, it approved a new BP project off America’s Gulf coast — the company’s first new project since the Deepwater Horizon disaster. And Energy Secretary Chris Wright directed Sable Offshore Corp. to restart its offshore oil rigs and pipelines off the coast of Southern California.
The International Energy Agency member countries also agreed Wednesday to release 400 million barrels of emergency oil. It’s the agency’s largest collective action, but oil from the Americas and European countries won’t be released until the end of March.
US gas prices have been on the rise due to the large-scale oil disruption, up 24% to an average of $3.70 a gallon since the start of the war, according to AAA.
The jump threatens to unwind one of Trump’s biggest talking points: that gas prices have dropped during his second term, especially when prices slipped below $3 a gallon in December — the lowest since May 2021.
Closures at the strait affect more than oil, though. Farmers across the world rely on fertilizer that is shipped through the Strait of Hormuz, potentially affecting grocery prices. And shipped perishables — like dairy, fruits, vegetables and fish — could be the first batch of goods to become more costly.
The-CNN-Wire
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