Oil Prices Surge as Iran Blockades Strait of Hormuz

Global oil prices rose over US$1 per barrel on August 14, with Brent settling at US$88.52, following a series of maritime attacks and a continuing blockade of the Strait of Hormuz. The United Arab Emirates attributed attacks on two Abu Dhabi National Oil Company tankers to Iran, while Ukrainian drone strikes on the port of Novorossiysk suspended exports from Russia's Sheskharis terminal.

Donald Trump and the United States government remain in a deadlock with Iran over a conflict that began February 28. A tentative June peace deal has collapsed, leading the U.S. to threaten an indefinite naval blockade and unprecedented economic isolation. President Trump has urged Americans to accept gasoline prices, which have risen 29% year-over-year to approximately $4.08 per gallon, to prevent Iran from acquiring nuclear weapons.

Iran continues to enforce its own blockade of the Strait of Hormuz, restricting traffic to only two vessels on Friday. Iranian officials assert the waterway will only open under their command. Tensions have expanded beyond the strait, with Iran-backed Houthi forces launching ballistic missile attacks on a port in Mocha, Yemen, and a drone strike on an Aramco facility in Najran, Saudi Arabia.