The international energy market has once again become volatile. Oil prices have suddenly surged in the global market amid a tough US naval blockade on Iran and a diplomatic stalemate.
In the latest trading session, the price of Brent crude oil jumped 8 percent to $120 per barrel, the highest in four years.
US President Donald Trump has said that the naval blockade imposed on Iran could continue for several months. According to him, this blockade is more effective than direct military action. He claimed that the sanctions have severely strained Iran’s economy and the situation is getting worse.
Uncertainty surrounding the Strait of Hormuz, one of the world’s most important energy routes, has added to concerns. The prospect of the strait reopening to normal is unlikely to disrupt global supply, raising fears that market volatility could be prolonged, analysts say.
A White House official said discussions were underway on possible steps to stabilize global markets and minimize the impact on U.S. consumers. However, diplomatic relations between the United States and Iran remain at a standstill. Iran has made it clear that sanctions imposed on it must be lifted before any agreement can be reached.
Meanwhile, Russian President Vladimir Putin has warned that renewed military tensions surrounding Iran could pose a serious threat to international security.
Iran, on the other hand, has also taken a tough stance. The country’s military has warned that it will be forced to take countermeasures if the US does not lift the naval blockade. In an interview with state media, a senior Iranian official said that there will be a strong response if the blockade continues.
According to analysts, if the ongoing tensions are not resolved quickly, instability in the global energy market could increase and have an impact on the global economy.