Oil prices fall as traders watch situation in the Strait of Hormuz

Oil prices are falling sharply today as traders watch US efforts to restore shipping in the Strait of Hormuz. At around 16:30 CEST, North Sea Brent crude was down nearly three percent, trading close to 111 dollars per barrel. US light crude West Texas Intermediate (WTI) was down roughly four percent at the same time, trading near 102 dollars per barrel.

Shipping in the Strait of Hormuz has been crippled by the conflict in the Middle East, which began in late February with US-Israeli attacks on Iran. Around a fifth of the world’s oil supplies normally pass through the strait.

The United States launched an operation on Monday seeking to reopen the Strait of Hormuz. Shipping company Maersk said today that one of its vessels, sailing under the US flag, had successfully left the strait under the protection of the US Navy.

"This shows that safe passage is possible to a limited extent under current conditions, helping to dispel the worst fears," said Tim Waterer, an analyst at KCM Trade.

"It is still more of a one-off than a full reopening (of the Strait of Hormuz)," he added.

Oil prices rose sharply on Monday after reports that Iran had intensified attacks on the United Arab Emirates (UAE) and ships in the Persian Gulf. "Prices remain highly volatile, particularly because of ongoing tensions in the Strait of Hormuz," said Priyanka Sachdeva, an analyst at Phillip Nova.

Oil prices in dollars per barrel (about 159 litres)