International oil prices rise on Iranian forces' seizure of ships in Hormuz... Brent crosses $100

Ships in the Strait of Hormuz

Following news that the Iranian Islamic Revolutionary Guard Corps (IRGC) seized ships attempting to pass through the Strait of Hormuz, Brent crude prices rose back above the $100 per barrel mark on the 22nd (local time).

On this day, the closing price of Brent crude futures for June delivery on the ICE Futures Exchange was $101.91 per barrel, up 3.5% from the previous session.

On the New York Mercantile Exchange, the closing price of West Texas Intermediate (WTI) crude for June delivery was $92.96 per barrel, up 3.7% from the previous session.

The Iranian Revolutionary Guard Corps Navy announced that it seized two container ships, the MSC-Francesca and the Defaminodas, into Iranian territorial waters for inspection of their cargo and related documents, claiming they attempted to secretly exit the Strait of Hormuz without permission from the Iranian military.

Iran's Mehr news agency reported that the container ship Euphoria was also seized by the Revolutionary Guard Corps Navy while passing through the Strait of Hormuz.

The UK Maritime Trade Operations (UKMTO) announced that one ship was attacked by a Revolutionary Guard high-speed assault craft in the Strait of Hormuz on this day.

Iran's seizure of ships occurred the day after U.S. President Donald Trump declared an extension of the 'two-week truce' with Iran, one day before its expiration. President Trump had previously stated that the naval blockade against Iran and other readiness measures would continue.

With Iran resisting the U.S. naval blockade against it and peace negotiations stalled, the Iranian Navy's seizure of ships is interpreted as Iran's intention to continue using control over the Strait of Hormuz as leverage in truce negotiations.

Giovanni Staunovo, a commodity analyst at Swiss bank UBS, analyzed that "as long as transit through the Strait of Hormuz remains restricted, the contraction in oil market supply will continue, and oil prices will maintain their support."

The U.S. Energy Information Administration (EIA) announced that as of the 17th, U.S. gasoline inventories were 228.4 million barrels, a decrease of 4.6 million barrels from the previous week.

The decline exceeded the decrease compiled by Reuters (1.5 million barrels), contributing to increased concerns about supply disruptions.