Oil prices climbed, rising from intraday lows, on the back of reports that Iran is planning to deploy mines in the Strait of Hormuz. This move will further restrict the oil flows at this major chokepoint and comes just a day after U.S. President Donald Trump warned Iran about effectively closing the Strait.
Oil Prices Jump as Iran Moves To Restrict Strait Of Hormuz
TradingView data shows that Brent Crude Oil futures have climbed above $90 from a low of around $84. The oil benchmark has pared most of today’s losses and is down just around 2% after dropping to an intraday low of $82.
U.S. Oil prices also rose above $80 from an intraday low of $77, although still down over 11% on the day. The rise in these oil benchmarks followed a report by CBS Senior White House Correspondent Jennifer Jacobs that U.S. intelligence assets have begun to see indications that Iran is taking steps to deploy mines in the Strait of Hormuz shipping lane.
This development comes just a day after Trump drew a red line on the Strait of Hormuz, warning Iran that he will hit them with a military response “twenty times harder” if it tries to disrupt oil flows at this chokepoint. Oil prices notably fell back amid the threat, extending their decline after Trump said the Iran war could end soon.
Iran’s move to deploy mines in the Strait of Hormuz would further deter vessels from passing through, further restricting oil supply. Bloomberg data showed that Hormuz traffic is at a standstill, with only Iran-linked vessels currently passing through this chokepoint. About 20% of the global oil supply passes through this Strait daily.
The Bitcoin price sharply retraced on the back of this report, falling below $70,000. TradingView data shows that the leading crypto is currently trading just below this psychological level, still up over 2% today.
Iranian FM Accuses U.S. Of Manipulating Markets
Iranian Foreign Minister Abbas Araghchi said in an X post that U.S. officials are posting fake news to manipulate oil markets. “It won’t protect them from [the] inflationary tsunami they’ve imposed on Americans,” he added.
Araghchi was likely reacting to U.S. Energy Secretary Chris Wright’s now-deleted post in which he claimed that the U.S. Navy escorted an oil vessel through the Strait of Hormuz, which caused oil prices to fall. However, White Press Secretary Karoline Leavitt confirmed that this claim was false.
The Iranian FM also suggested that the market wasn’t pricing in the extent to which the war could restrict oil supply. “Markets are facing biggest shortfall in HISTORY: bigger than Arab Oil Embargo, Iran’s Islamic Revolution and the Kuwait invasion COMBINED,” he said.
It is worth noting that Iran has ruled out negotiations with the U.S. despite Trump saying talks with Iran were possible. However, Iran’s move to deploy mines is likely to escalate tensions further.
In a Truth Social post, Trump ordered Iran to immediately remove these mines if it has put any on the Strait of Hormuz. “If for any reason mines were placed, and they are not removed forthwith, the Military consequences to Iran will be at a level never seen before. If, on the other hand, they remove what may have been placed, it will be a giant step in the right direction,” he said.
