US Pushes Global Coalition to Reopen Hormuz amid Oil Surge
The U.S. is advocating for other nations to create an international alliance to reinstate freedom of navigation in the Strait of Hormuz, based on a State Department cable reviewed by Reuters, as oil prices spiked to their highest levels in over four years amid concerns of prolonged interruptions to global fuel supplies.
Two months into the conflict initiated by U.S.-Israeli attacks on Iran, the crucial maritime route is still shut, halting 20% of global oil and gas supplies. This has caused global energy prices to spike and increased worries about the potential for an economic recession.
Attempts to settle the dispute have reached a standstill, which the United States is attempting to break with a naval blockade of Iran’s oil shipments, the nation's economic lifeblood.
As discussions have come to a halt, U.S. President Donald Trump is set to be briefed on Thursday regarding plans for new military strikes on Iran, aimed at encouraging its return to negotiations, as reported by Axios late on Wednesday.
This led to significant increases in oil prices, with the key Brent crude contract LC0c1 reaching over $125 a barrel at one moment, partly due to technical elements linked to the contract's expiration later on Thursday.
Since the beginning of the year, Brent prices have more than doubled, reaching their peak on Thursday since March 2022, driving inflation and causing fuel prices to hit politically sensitive levels globally.
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Iran has committed to ongoing disruptions in traffic through the Strait as long as it faces threats, potentially leading to further interruptions in Middle East oil supply due to a conflict that has claimed thousands of lives.
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Tehran cautioned on Wednesday about "unprecedented military measures" in response to the ongoing U.S. blockade of Iran-related ships. Trump has stated that Iran is not allowed to possess a nuclear weapon, while Tehran claims its nuclear goals are for peaceful purposes.
“They are unfamiliar with how to establish a non-nuclear agreement.” "They should wise up quickly!" Trump stated in a social media update on Wednesday, without clarifying what such an agreement would involve.
The post showcased a mock image of him with dark sunglasses and holding a machine gun, captioned, “No more Mr. Nice Guy.”
As Washington and Tehran exchanged public threats, mediator Pakistan aimed to prevent escalation while both sides communicated regarding a possible agreement, a Pakistani source reported on Wednesday.
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Trump met with oil executives and “talked about the actions President Trump has implemented to ease global oil markets and measures we could adopt to maintain the current blockade for months if necessary while reducing the effect on American consumers.