Brent crude futures pushed above $100 a barrel on Friday, March 13, after Iran’s new supreme leader said the Strait of Hormuz should stay closed.
Mojtaba Khamenei, son of the late Ayatollah Ali Khamenei, had been appointed earlier in the month. This was his first public statement in the job. Keeping the strait shut, he said, would pressure Iran’s adversaries. He also warned that every US military base in the region could become a target if the bases were not closed.
The move on the day was modest, about 1%, and Brent traded above $100 only briefly during Asian and European hours. Traders were reacting to something bigger than one day’s tick. Roughly one-fifth of global oil supply passes through the Persian Gulf corridor, and tanker traffic through the strait was already severely curtailed. The source of the report described the situation as one of the most significant energy supply shocks in decades.
Authorities warned that millions of barrels a day had already disappeared from global markets. Energy traders priced in a long squeeze, with sustained volatility and inflation pressure the main worries.
The day before, US officials said Iran had started laying mines in the strait. It was using smaller boats to do it, they said, because US forces had destroyed its larger vessels. Mines could disrupt global shipping further.
