JERUSALEM (dpa-AFX) - A pause in fighting between Israel and Iran-backed Hezbollah in Lebanon, and President Donald Trump's statement that the US and Iran are 'very close' to making a deal to end the weeks-old Middle East war has sent oil prices down on Friday.
Brent crude oil price decreased by more than 3 percent to $96.22 a barrel, while the US-traded WTI fell by more than 4 percent to $90.84.
Oil has been trading below $100 level mostly this week after rising above $100 per barrel Monday as the U.S. military announced that it would implement a blockade in the Strait of Hormuz beginning 10 a.m. ET Monday, as ordered by President Donald Trump, after the weekend peace talks in Pakistan failed.
The news of U.S. blockade and the failure of peace talks escalated concerns that the global energy crisis will deepen, putting immense pressure on the global oil market.
Oil prices fell back to under $100 Tuesday as hopes of a second round of US-Iran peace talks came alive with President Donald Trump saying that Iran had contacted U.S. officials regarding a potential deal to end hostilities.
The Strait of Hormuz is one of the world's most important and strategic maritime corridors, with nearly one-fifth of global oil trade and large volumes of commercial goods passing through it each day.
Several vessels were struck while attempting to cross the chokepoint since the conflict escalated. Traffic has fallen sharply from a daily average of 129 ships in February to just a handful in March and April.
Regarding the U.S. blockade on ships going to and leaving Iranian ports, Secretary of War Pete Hegseth said at a press briefing at the Pentagon Thursday that Iran should make a deal with U.S. negotiators to avoid continued military action and to remove the blockade.
Air Force Gen. Dan Caine, chairman of the Joint Chiefs of Staff, said that the blockade is effective, and a targeted operation.
'This blockade applies to all ships, regardless of nationality, heading into or from Iranian ports,' Caine said. 'The U.S. action is a blockade of Iran's ports and coastline, not a blockade of the Strait of Hormuz. Enforcement will occur inside Iran's territorial seas and in international waters.'
Caine warned that if needed, U.S. forces would fire warning shots and seize 'Any ship that would cross the blockade.'
However, BBC reported on the basis of tracking MarineTraffic data that after the U.S. announced the blockade on Monday, four cargo ships that left Iranian ports have crossed over the U.S. blockade line. Two of the vessels are reportedly heading to India, while one each are bound for China and Pakistan.
Meanwhile, the head of the International Energy Agency said in an interview published on Friday that it may take up to two years for oil producing nations in the Middle East to restore their oil and gas production capacity to pre-war levels.
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