Oil prices climb above US$100 as Iran tightens grip on Hormuz

Oil prices surged past US$100 a barrel on Thursday, following Iran's reported attacks on over a dozen vessels attempting to navigate the Strait of Hormuz. The Iranian government expanded its no-go zone around the critical shipping route on Wednesday, further restricting traffic since the war with the United States commenced on February 28.

The price of Brent crude, the global benchmark, reached US$101.28 per barrel in early Asian trade, marking its highest level since July. The escalation occurred after Iran's Revolutionary Guards targeted two US vessels, eight oil tankers, and ten non-compliant ships in the strait, which typically carries approximately one-fifth of the world's oil.

UKMTO, a British maritime monitor, reported disabling fire incidents on several merchant vessels in the Northern Arabian Gulf and the Gulf of Oman. US President Donald Trump had pledged that oil prices would decline "as soon as" the US wins the war against Iran, a conflict stemming from US-Israeli strikes on Tehran in early February.

Despite Iran's powerful Revolutionary Guards extending prohibited zones into the Gulf of Oman and the Arabian Sea, Trump asserted control over the Hormuz Strait, even suggesting its renaming as "Trump Strait." The war's trajectory remains uncertain, with US officials privately warning that it might persist through the remainder of Trump's term, which ends in November.

Iran has retaliated against US forces, striking a Jordanian military base in response to the destruction of five Iranian oil tankers the previous day. Iran's foreign ministry denounced the attack on its oil tankers as a "threat to regional and international peace and security," while the US military claimed it was responding to an Iranian attack on an American warship.

The International Atomic Energy Agency (IAEA) board of governors, in a move that intensifies pressure on Tehran, voted to refer Iran to the UN Security Council for its alleged nuclear non-compliance, with eight out of 23 member states voting against the resolution.