- WTI has rallied to a high of 56.51 on threats to the exports out of the Strait of Hormuz.
- Britain is requiring a unified effort between European for a safe shipping passage.
Following last week’s British tanker seizure in the Strait of Hormuz and rising tensions, supporting the bid in the price of oil, Reuters has reported that Britain is requiring a unified effort between European nations such as France, Denmark, Italy and the Netherlands as well as from Germany, Spain, Sweden and Norway for a safe-shipping passage in the Straight of Hormuz.
This is designed to combat the continuous antagonistic seizures of foreign vessels and tankers by the Iranians, which is ultimately disrupting the oil supply chains for foreign markets. However, military presence in the Strait of Hormuz could go one way or the other, depending on how committed Iran is to disrupting the shipping zone.
Market implications
This is exactly the sort of news that the market has been on watch out for, giving rise to a bid in the price of oil. WTI has rallied to a high of 56.51, exceeding the previous highs of 56.44. The heightened tensions could lead to a closure of the Strait of Hormuz which would have an impact on oil exports.
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