Hormuz: Iran rejects Oman’s proposal for joint management of the Strait
Virendra Pandit
New Delhi: Accusing the US and Saudi Arabia of pressuring Oman to advance the proposal of a regional joint management of the Strait of Hormuz, Iran has rejected the “unrealistic” plan, the media reported on Wednesday.
Iran said the proposal has no chance of success.
With this development, crude oil futures traded higher on Wednesday morning after the US and Saudi Arabia conducted joint strikes on Iran-backed targets in Iraq.
Tanker traffic through the Strait of Hormuz remains essentially halted. While Iran and Oman have held talks on managing vessel transits through the key waterway, Iran has rejected Oman’s proposal for a 50-50 shipping plan. Iran wants oversight of both inbound and outbound vessels.
At 10.03 am on Wednesday, October Brent oil futures were at USD 84.95, up by 3.50 per cent, and September crude oil futures on WTI (West Texas Intermediate) were at USD 82.32, up by 3.86 per cent.
August crude oil futures were trading at Rs. 7918 on Multi Commodity Exchange (MCX) during the initial hour of trading on Wednesday against the previous close of Rs. 7603, up by 4.14 per cent, and September futures were trading at Rs. 7723 against the previous close of Rs. 7449, up by 3.68 per cent.
A statement by the US Central Command said the CenCom and the Saudi Arabian Armed Forces conducted precision strikes in Iraq on July 28, against Iran-aligned terrorists that the Islamic Revolutionary Guard Corps (IRGC) directed to attack US forces and Saudi energy infrastructure.
The US and Saudi fighter aircraft struck multiple terrorist logistics and weapons sites across eastern Iraq in a strong response to over 30 IRGC-directed aerial drone attacks in the last 72 hours, it said, adding, the unwarranted attacks against US forces were not successful.
Experts said the crude prices popped higher in early morning trading on Wednesday after a heavy sell-off in the oil market over the last three days. Renewed strength comes after the US said it intercepted a surprise attack on US troops.
Saudi Arabia also intercepted drones from Iranian-backed groups in Iraq, which were targeting Saudi energy infrastructure. These developments threw cold water on the idea of a swift de-escalation in the Persian Gulf.
With Saudi oil infrastructure increasingly targeted, the risk of more prolonged supply disruptions is growing. Reports said that the 400,000 barrels a day Jazan refinery in Saudi Arabia has shut following Houthi attacks over the last weekend. This could only add to tightness concerns in the refined products market already dealing with disruptions from the Persian Gulf, as well as Russia.
August natural gas futures were trading at Rs. 259.50 on MCX during the initial hour of trading on Wednesday against the previous close of Rs. 261, down by 0.57 per cent.
