Oil price rises again despite Trump's announcement of 'complete destruction' of strategic Kharg island
Another weekend of violence heightened global market concerns about war in the Middle East, following US attacks on a vital oil hub, The Guardian writes on Monday.
Oil prices rose again earlier this week amid growing supply fears after the US struck the crucial oil hub on Iran's Kharg Island and US President Donald Trump called on allies to help reopen the Strait of Hormuz.
Brent crude, the international benchmark, rose 1.8 percent to $104.98 a barrel in early Monday trading.
The recent weekend of violence in the Middle East has heightened concerns about the conflict and its ramifications for global energy markets.
The US president said on Saturday that US strikes had “completely destroyed” most of Kharg Island, telling NBC News that the US military might hit the area “a few more times, just for fun”.
Kharg, an eight-kilometer-long coral island in the Persian Gulf located about 26 kilometers from the mainland, is a key processing hub for Iran, through which 90 percent of the country's oil exports typically pass.
Trump said on social media that he had avoided hitting oil and energy infrastructure on the island “for reasons of decency” and that all military targets had been hit.
But the decision to hit Kharg Island, which was largely left untouched by the US-Israeli operation in the first two weeks of the joint bombing, did not calm the fears roiling global markets.
The Strait of Hormuz, one of the world's most important waterways, through which about a fifth of international oil supplies typically pass, has been virtually closed since the start of the Middle East conflict.
Trump said this weekend that “many countries” would send ships to help reopen the strait. He did not specify which countries would do so, but publicly urged certain US allies – France, Japan, South Korea and Britain – as well as China to join a “joint effort” to protect ships passing through the strait from Iranian attacks.
The response was extremely reserved. South Korea's foreign ministry said it was “analyzing various measures from multiple perspectives” to help secure energy transport routes. British ministers are drawing up plans to send mine-sweeping drones into the strait amid concerns that complying with Trump's request to send ships could worsen the crisis.
Oil prices topped $100 a barrel last week for the first time since Russia's invasion of Ukraine four years ago, as the U.S. and Israel sparked a market rally that drove up fuel costs around the world — and propelled shares of major oil companies to record highs.
Frustration has intensified in recent days as fuel costs have continued to rise around the world. The average US fuel price hit $3.70 a gallon on Sunday, according to AAA, up 62 cents from a month ago.
“I don't care about Iran at all. I don't want to pay more for gas,” Kevin Dass, a part-time father of two, told The Guardian in Detroit last week after paying $3.49 a gallon to fill up his car.
Trump, for his part, has tried to play down the risk of fuel prices staying high for a long time. “I think they will go below the previous level,” the US leader told NBC.
“There's so much oil, so much gas — there's so much out there,” Trump added. “But you know, it's a little locked up. It'll be unlocked very soon.”
Asian countries have scrambled to deal with the energy crisis, from fuel subsidies in Thailand to rationing in Bangladesh.
Wholesale natural gas prices rose in Europe on Monday morning as conflict continued to disrupt liquefied natural gas (LNG) exports from the region. The reference contract for the following month, from the Netherlands, increased by 1.82 euros, reaching 51.94 euros per megawatt-hour.
European stock markets were mixed, with the FTSE 100 index marginally higher, while shares in France, Germany, Spain and Italy fell by less than 1%.
