Oil prices eased by 1% on Monday as U.S. allies rejected President Donald Trump’s repeated calls for help to unblock the Strait of Hormuz.
“Brent crude futures fell 92 cents to US$102.22 per barrel by 1248 GMT, while U.S. West Texas Intermediate (WTI) crude dropped US$3.45, or 3.5%, to US$95.26,” Reuters said in a March 16 report.
The outlet reported that on Friday, Brent closed at its highest since August 2022 and WTI at its highest since July 2022, putting both crude benchmarks up more than 40% since the U.S. and Israel attacked Iran on February 28.
A recent analysis by Rystad Energy predicted that Brent crude prices could climb as high as US$135 per barrel if the current geopolitical tensions disrupt oil supplies for several months.
The last time oil prices were this high was the 2022 Ukraine war | OilNOW
On Sunday, Trump called on NATO countries to form a naval coalition with the U.S. to deploy warships to secure the Strait of Hormuz, through which about one-fifth of the world’s oil shipments transit. However, a swift reaction followed on Monday morning, with European countries rejecting this call.
“This is not our war, we have not started it,” German Defence Minister Boris Pistorius said in Berlin on Monday.
Joining Germany in rejecting the U.S. President’s call to join a mission to keep the waterway open were Spain, Italy, the United Kingdom, and other European countries.
The Strait of Hormuz has become a central concern for energy markets during the conflict. One-fifth of the world’s oil shipments transit through the narrow waterway between the Persian Gulf and the Gulf of Oman.
“Hormuz closure makes $100 oil the baseline, not the risk case. Crude prices will stay higher for longer as it will take time to rebuild stocks even if supply improves in April,” analysts from consultancy Eurasia Group said in a note, according to the Reuters report.
The high oil prices have some upside for Guyana. Earlier this month, JP Morgan predicted the US$100 per barrel scenario, and at that price, Guyana can expect higher revenues from gross sales.
On March 2, Ebrahim Jabari, a senior adviser to the commander-in-chief of Iran’s Islamic Revolutionary Guard Corps (IRGC), announced that the strait was “closed” and if any vessels tried to cross it, the IRGC and the navy would “set those ships ablaze”.
