Brent Crude Tops $110 as Hormuz Stays Shut and Markets Slide

Brent crude rose above $110 a barrel on Friday as the Strait of Hormuz remained virtually shut, according to UPI and Euronews. UPI put the price at $111.41 on Friday morning. Euronews reported Brent at $110. UPI said the move followed a 5.7 percent jump on Thursday. The S&P, gasoline and diesel figures below are UPI’s and were not confirmed in a second outlet.

The rise has come despite a political de-escalation. UPI noted that oil prices have risen steadily since Monday, even though President Trump backed off his plan to bomb Iran’s energy infrastructure. Trump is now postponing strikes for 10 days because of what he calls negotiations, UPI reported, and Euronews said the deadline was extended by 10 days, reportedly at Iran’s request. Iran denies that talks are taking place, UPI said.

The strait normally carries about a fifth of the world’s oil and gas, Euronews reported, and Tehran has kept it virtually shut since hostilities began nearly a month ago. Iran told the United Nations that non-hostile vessels may pass, both outlets reported, but Euronews said wary ships were not convinced by Tehran’s assurances.

Consumers and investors are feeling it. UPI reported that the S&P 500 has fallen for five straight weeks, its first such streak in four years, and that European, South Korean and Taiwanese indexes also fell Friday. U.S. gasoline averages $3.98 per gallon, UPI said, and diesel is 43 percent above its pre-war level at $5.38 per gallon.

Europe is facing a similar squeeze. Euronews reported that the TTF gas benchmark was around 54 euros per megawatt-hour and that European Economy Commissioner Valdis Dombrovskis warned that a prolonged conflict could cause stagflation, affecting growth by 0.4 points and raising inflation by one point.

Diplomacy has not yet lowered the risk. Euronews reported that G7 foreign ministers agreed to protect passage through the strait, but only after the war ends. The escort mission would operate “once calm has been restored,” French Foreign Minister Jean-Noel Barrot said, and in a “strictly defensive posture.” Secretary of State Marco Rubio called it “a post-conflict necessity,” Euronews reported.