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Oil prices have soared as tensions in the Strait of Hormuz cast doubt on the end of the war between the United States and Iran.
Brent crude, the world’s main benchmark for oil prices, rose nearly 6 percent on Monday to $114.44 a barrel.
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Brent futures were slightly lower on Tuesday morning, trading at $113.54 as of 02:00 GMT.
The latest price hike came after the US military said it had destroyed six Iranian submarines in response to Iranian attacks on merchant ships in the waterway, and the United Arab Emirates also said it had been attacked by Iranian missiles and drones.
An Iranian military source cited by the IRNA news agency has denied that US forces have sunk several Iranian boats, calling the US claims “false”.
The market is pushing up oil prices because it creates “more oil spills and the possibility that the Strait of Hormuz will be closed beyond the Trump administration’s deadline,” said June Goh, chief oil market analyst at Sparta in Singapore.
Although US President Donald Trump announced on Monday that the US military would “guide” commercial vessels through the difficult passage, shipping companies have been reluctant to go through the waterway due to security concerns.
Although the US military reported that two US-flagged commercial ships crossed the river a few hours after Trump announced “Project Freedom”, there have been no signs of a resumption of maritime traffic in the region.
On Monday, the head of the International Transport Workers’ Federation (ITF) said ships should not be asked to cross the road “without full safety guarantees”.
“The freedom of navigation must be restored in accordance with international law, but it must be done in a coordinated, transparent way and put the safety of seafarers first,” ITF Secretary General Stephen Cotton told Al Jazeera, adding that there was “little clarity” on how the operation “will provide security for the people, or an assurance from Iran that the voyage will be guaranteed”.
“Until this is confirmed, we are asking ship owners and flag states not to take this announcement as a green light,” Cotton said.
“These workers have already endured weeks of fear, uncertainty and hardship. They should not be put through the trouble.”
According to the International Maritime Organization (IMO), 20,000 seafarers are trapped in about 2,000 boats in the Strait of Hormuz.
The IMO has said that “there is no precedent for such a large number of seafarers in modern times”.
The Secretary General of the United Nations, António Guterres, earlier this week called for freedom of navigation, saying that the closure of the waterway “will prevent you from sending oil, gas, fertilizers, and other essential goods” and “disrupt the global economy”.
Brent prices have risen more than 50 percent since the conflict began in late February, amid a daily decline of 14.5 million barrels.
Even if Washington and Tehran agree to end the war, oil prices are expected to remain high for some time due to the increase in unloaded goods, damage to regional infrastructure, and the need to remove Iranian mines, according to experts.
Goh, an analyst at Sparta, said he expects prices to rise sharply as countries enter into their own power.
“As more and more OECD reports are published showing very low prices, we should see Brent prices rise,” Goh said.
