Oil prices rise as Iran closes Strait of Hormuz, threatens to fire ships trying to pass

A commander of Iran’s Revolutionary Guard said Monday that the Strait of Hormuz has been closed and warned that any vessel attempting to pass could be targeted, Iranian ⁠media reported.

The move comes after Supreme Leader Ayatollah Ali Khamenei was killed ⁠in an Israeli strike, which would threaten to choke a fifth ⁠of ‌global ‌oil flows ⁠and ‌send crude prices sharply ⁠higher.

Oil prices made more gains on Tuesday after Iran threatened to “set fire to anyone who tries to pass through” the Strait of Hormuz as the conflict between his country and the US and Israel continues.

In afternoon trade in Asia, Brent crude was around 3.2% higher at more than $80 (£59.67) a barrel, while US-traded oil was up by about 2.6%.

It comes after oil and gas prices surged on Monday and as the US government is set to announce plans to deal with the rising cost of energy.

The Strait is the world’s most vital oil export route, connecting the largest Gulf oil producers, such as Saudi Arabia, Iran, Iraq, and the United Arab Emirates, with the Gulf of Oman and the Arabian Sea.

Earlier, the Revolutionary Guards said a fuel tanker, identified as the Honduran-flagged Athe Nova, was ⁠burning in the ⁠Strait of Hormuz after being hit by two drones, Iranian news agencies reported.

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A Guard’s statement said the vessel was acting in “unison with America” ⁠and ⁠identified it as Athen Nova. VesselFinder and other tracking data providers showed the Athe Nova, a 96-meter tanker, was in the area shortly before the attack.

An Iranian military spokesman did not explicitly state that the ship was ⁠hit by Iranian drones but named the incident in a report he gave on state TV about the Guards’ military operations in the Gulf area.

Iranian media reports suggested that the vessel was providing fuel ⁠for ‌U.S. ‌Navy ships. Reuters was not immediately ⁠able to contact ‌Athe Nova’s registered owner. The ship’s manager did not immediately comment.