Oil prices rise after Trump says Iranian ship seized

Market Reaction to US Naval Action

Asia saw a surge in global oil prices during Monday’s trading session following President Donald Trump’s announcement that the US had detained an Iranian-registered vessel. The move coincided with Iran’s prior declaration to re-close the Strait of Hormuz to commercial traffic, threatening ships that approach the critical waterway. Brent crude futures climbed 4.74% to $94.66 per barrel, while West Texas Intermediate gained 5.6% to $88.55.

Strait of Hormuz Closure and Strategic Tensions

The strait, a vital route for 20% of global oil and liquefied natural gas, remained shut on Sunday. This came after the Islamic Revolution Guard Corps (IRGC) halted a temporary reopening, citing US naval blockades as a breach of their ceasefire terms. Iran vowed to keep the passage closed until the US lifts its blockade, escalating concerns over disrupted energy flows.

Regional Impact and Conservation Measures

Asia has been disproportionately affected, relying on the strait for 90% of its energy imports. In response, governments implemented measures such as remote work mandates, shortened workweeks, and early university closures to preserve fuel supplies. Southeast Asian nations like Singapore and Thailand urged citizens to reduce air conditioning use. Even China, with reserves covering three months of imports, imposed restrictions to curb a 20% fuel price surge.

Analyst Insights on Market Volatility

“Oil markets continue to gyrate in response to oscillating social media posts by the US and Iran, rather than the realities on the ground which remain challenging for oil flows to resume in a rapid fashion,” said Saul Kavonic from MST Marquee. The analyst highlighted that negotiations are unfolding in real time over the Strait of Hormuz, influencing price swings.

Energy Crisis and Industry Adjustments

Since the start of the Iran conflict, energy prices have fluctuated wildly. Brent crude, a key benchmark, was trading below $70 per barrel before the crisis, but reached nearly $120 on March 9. Airlines across the region are adapting to soaring jet fuel costs. The IEA’s head, Fatih Birol, warned that Europe might face six weeks of limited jet fuel supplies, risking flight cancellations if blockades persist. Meanwhile, UK petrol and diesel prices eased after a series of increases.