WASHINGTON (dpa-AFX) - Crude oil has skyrocketed on Friday as output-and-supply disruption risks dimmed the expectations of a resumption of export flows through U.S. diplomacy after Iran turned rigid to peace talks.
WTI Crude Oil for May month delivery was last seen trading up by $5.32 (or 5.63%) at $99.80 per barrel.
As the gulf war entered day number twenty-eight, Iran's Islamic Revolutionary Guards Corps today asserted its full control over the Strait of Hormuz (a critical chokepoint for oil and energy vessels) and has shut it down for vessel transits.
Reportedly, the military group turned back three ships trying to transit the Strait of Hormuz.
The IRGC also warned that any ship attempting to pass through the strait will be met with a 'harsh response' and stressed that vessels connected to the U.S. or Israel will be completely prohibited.
Besides this, the IRGC also urged civilians across the Middle East to stay away from areas near U.S. forces.
This latest declaration is seen as a major escalation in the broader gulf confrontation going on for nearly a month.
As oil supply to the magnitude of millions of barrels per day are being curtailed in the Middle East, oil-producing Arab nations have already slashed or halted output with no way to export the oil out of the region.
Analysts feel that the resultant shortage concerns that have already hit Asia could also spread to Europe.
This development contradicts U.S. President Donald Trump's claims that Iran had agreed to allow 10 oil tankers to pass through the strait to show Iran's seriousness about entering into negotiations.
With the 'five-day pause' on any attacks by the U.S. forces on Iran's energy and power installations coming to an end today, Trump announced that he was extending the pause until Monday, April 6.
Trump insisted that despite the negativity propagated by a section of media outlets, the talks between the U.S. and Iran were 'going very well.'
Earlier, Trump's Special Envoy Steve Witkoff told a cabinet meeting that there were 'strong signs' coming in indicating that Iran wants to negotiate.
Through Pakistan, the U.S. had sent a 15-point-peace proposal to Iran to end the war. Among the key demands, the U.S. wanted Iran to end its nuclear ambitions and to free the Strait of Hormuz from the blockade.
Claiming to have hit the 'heart of Tehran,' Israeli air raids targeted the city of Qom in Iran and the Urmia region.
The Israeli Air Force also launched a wave of strikes against infrastructure connected to Hezbollah in Beirut, Lebanon.
In retaliation, Iran continues to target Kuwait, the U.A.E., Saudi Arabia, and Jordan.
Quoting defense officials, the Wall Street Journal reported that the Pentagon is considering sending around 10,000 ground troops to the Middle East.
Experts are concerned of a sharp jump in oil prices in the near-term as the situation appears far from any de-escalation.
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