Following a major U.S.-Iran re-escalation over the Strait of Hormuz this weekend, Iran’s Islamic Revolutionary Guard Corps (IRGC) on Monday warned that continued U.S. interference in the chokepoint “could lead to greater incidents in the global oil and gas sector.”
The renewed hostilities, which began last week with U.S. military strikes on Iran in response to Iranian attacks on commercial vessels in the Strait of Hormuz, continued to escalate during the weekend, with another round of U.S. strikes on Iran and Iran’s claim that the chokepoint is once again closed.
In a statement carried by Reuters, the Revolutionary Guards said that an end to the U.S. military interventions in the Strait of Hormuz was the only way in which the IRGC would restore regular shipping traffic.
“Continued interference could lead to greater incidents in the global oil and gas sector,” Iran’s IRGC warned.
Mohammad Baqer Qalibaf, Iran’s top negotiator, on Sunday wrote on X, “The era of one-sided deals is OVER. We told you: keep your word or pay the price. Reality is knocking.”
The markets are struggling to digest all the noise about whether the Strait of Hormuz is passable safely, but they have started to price in, again, some kind of renewed disruption in the Hormuz traffic.
This was reflected in rising oil prices and falling equities and government bond yields early on Monday, on expectations that a longer disruption could stoke inflation fears.
Various ship-tracking tools and analytics firms have seen an uptick in dark-mode transits through Hormuz this weekend, while no vessel had braved the chokepoint in the early hours of Monday, at least not any that would be visible on tracking services.
“Escalation has slowed vessels transiting the strait to a trickle, renewing concerns over oil supply tightness through the third quarter,” ING’s commodities strategists Warren Patterson and Ewa Manthey wrote in a note early on Monday.
By Charles Kennedy for Oilprice.com
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