Oil prices rallied again on Monday morning after Iran’s Fars news agency reported that two missiles struck a U.S. Navy vessel near Jask Island on the Gulf of Oman, just outside the eastern entrance to the Strait of Hormuz. Brent crude for July delivery was up 2.82% to trade at $111.12 per barrel at 8:00 am ET while WTI crude for June delivery rallied by a similar margin to change hands at $104/bbl.
According to Fars, Iran’s semi-official news agency, the vessel ignored repeated warnings by the Islamic Revolutionary Guard Corps (IRGC) to halt, resulting in the strikes. The news agency has reported that the vessel was damaged and forced to retreat, a claim the U.S. Central Command (CENTCOM) has denied.
The incident comes in the wake of U.S. President Donald Trump’s announcement of Project Freedom, a naval mission to guide hundreds of neutral merchant ships and approximately 20,000 seafarers currently stranded in the Strait of Hormuz. The U.S. has established a new security zone in Omani waters, advising ships to avoid traditional routes due to the risk of sea mines. The Trump administration insists that the initiative is not an escort mission, raising questions about how the U.S. will physically protect vessels without a traditional naval escort.
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While Trump has warned that interference would be met with force, it remains unclear how U.S. forces will respond to Iran’s shore-based anti-ship missiles or swarms of small attack craft. Recently, CENTCOM confirmed precision strikes on Iranian coastal missile positions near the strait to protect freedom of navigation.
Negotiations over reopening the strait remain deadlocked as Iran evaluates Washington’s response to its latest 14-point peace proposal. While Iran seeks an end to the U.S. naval blockade and sanctions, Trump has expressed skepticism, calling the proposal “unacceptable” in its current form and demanding immediate, unconditional reopening of the strait.
By Alex Kimani for Oilprice.com
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