Market pundits remain optimistic about a breakthrough in the talks, as the US and Iran continue discussions to hold another round of face-to-face negotiations toward a longer-term truce before a two-week ceasefire expires.
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Washington’s decision to blockade Iranian ports in the Strait of Hormuz is sending tremors through global energy markets, raising fears of a fresh oil shock by threatening supplies to Asia.
Iran had continued to pump crude to Asia since the start of the Middle East war, partly shielded by its elusive “dark fleet.”
Roughly one-fifth of the world’s oil normally flows through the vital waterway. In recent weeks, Iran has tightened the screws, sharply slowing maritime traffic and reportedly charging transit fees.
A US naval blockade took effect on 13 April with the US moving to cut off vessels transiting the waterway to and from Iranian ports and coastal areas, which could lead to increased tensions with Iran, according to Rizal Commercial Banking Corp. chief economist Michael Ricafort.
Ricafort said market pundits remain optimistic about a breakthrough in the talks, as the US and Iran continue discussions to hold another round of face-to-face negotiations toward a longer-term truce before the two-week ceasefire expires.
US President Donald Trump signaled further talks after Iran reached out to his administration.
Iranian President Masoud Pezeshkian said his country was prepared to continue discussions within a framework of international law and regulations.
The additional blockade of Iranian ports threatens to land another blow to global oil and gas supplies after the fighting damaged energy facilities in the Gulf states and blocked their export through the Strait, Amir Handjani of the US‑based Quincy Institute for Responsible Statecraft said.
Just days after launching the war against Iran with Israel on 28 February, the US temporarily eased some sanctions on Tehran to prevent an abrupt energy shock, particularly for Asian economies.
On Sunday, the Felicity, a tanker operated by the National Iranian Tanker Company (NITC), delivered two million barrels of oil to India, the first above-board shipment since 2019, according to tracking site Tanker Tracker.
Crude oil still flowing
Iranian crude has been helping ease the market’s struggle to meet demand so far, Handjani told AFP, warning that the blockade now threatens that fragile balance.
“What is the US Navy going to do? They’re not going to confront Chinese, Indian and Pakistani merchant ships loading in Iranian ports,” he said. “That’s an act of war.”
China remains the world’s largest importer of Iranian crude, and on Tuesday it said the US blockade was “dangerous and irresponsible.”
Oil prices, already climbing, will continue to surge, Handjani predicted.
Prices jumped eight percent to above $100 a barrel Monday in early Asian trading, just hours after the blockade was announced.
For expert Elisabeth Braw of the Atlantic Council, “it’s a bit of a Hail Mary move” by Washington after it had “exhausted all options.”
Blockading merchant ships violates the UN Convention on the Law of the Sea and is illegal, she noted.
Garin seeks meeting
Meanwhile, Energy Secretary Sharon Garin said she is meeting with US Embassy officials to discuss the blockade.
The Department of Energy had negotiated with the Iranian Embassy to allow oil tankers delivering crude to the Philippines to transit through the Strait.
“Supposedly, they are blockading today, if I’m not mistaken. We’ll see how that pans out, but I’m supposed to have a meeting scheduled with them tomorrow. But yes, we are continuously holding dialogues with the other embassies within the week,” Garin said in a Palace briefing on Tuesday.
Garin maintained the country has enough reserves of diesel, gasoline, kerosene, and liquefied petroleum gas (LPG).
She said there is an average 50-day supply of all products. For LPG, there is a 36-day supply; for kerosene, 105 days; for diesel, 49 days; and for gasoline, 54 days.
Garin said this was relayed to the members of Unified Package for Livelihoods, Industry, Food and Transport Committee during their third meeting with President Ferdinand Marcos Jr. on Tuesday.
She appealed to the public to cut their electricity and fuel consumption.
