Global oil prices rose after U.S. President Donald Trump issued new threats to Iran, including saying he would seize the Strait of Hormuz if an agreement with Iran could not be reached.
Foreign news agencies reported that oil prices climbed on Sunday after President Donald Trump told Fox News that the U.S. might resume bombing and could “take control” of the Strait of Hormuz, a critical strategic point for global energy trade, if no deal with Iran is achieved.
Brent crude oil prices surged 1.35% to $81.66 per barrel, while U.S. West Texas Intermediate (WTI) crude rose 2.4% to $77.66 per barrel.
Negotiations in Switzerland between the U.S. and Iran stalled on Sunday due to issues involving the Strait of Hormuz, the Lebanese ceasefire agreement, and Iran’s nuclear program. However, a U.S. official said talks would continue “throughout the night.”
Trump also floated the idea that the U.S. might charge transit fees for passage through the Strait of Hormuz if no agreement is reached, despite the current memorandum of understanding between Washington and Tehran committing to reopen this shipping route without fees for 60 days.
Trump’s threat came after Iran announced on Saturday that it would close the strait, accusing the U.S. of “clear contract violations.”
Karen Young, a researcher at Columbia University, said on CNN’s “Fareed Zakaria GPS” on Sunday that if negotiations succeed and maritime traffic in the Strait of Hormuz returns to pre-war levels, oil prices could “plummet sharply” due to a surge of oil flooding the market.
Additionally, lower crude oil prices would mean cheaper pump prices for American motorists. According to the American Automobile Association (AAA), the average U.S. gasoline price on Sunday was about $3.94 per gallon, nearly 14% lower than the previous month but still nearly $1 higher than before the war.
Meanwhile, Dow futures fell 0.4%, S&P 500 futures dropped 0.4%, and Nasdaq futures declined 0.6%.
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Source:cnn