Oil Prices Go Up Because Ships Cannot Pass Through a Very Important Waterway
Introduction
Oil prices went up on Friday. One kind of oil cost more than $106 for one barrel. This happened because ships cannot pass through the Strait of Hormuz. The United States and Iran are stopping ships and taking them. People are worried about the world''s oil supply.
Main Body
The price of Brent oil went up more than 1.25% to $105.38 for one barrel. The price of US oil went up 1.14% to $96.96 for one barrel. Earlier on Friday, Brent oil cost $106.80 for one barrel. That was almost 5% more than on Wednesday. On Wednesday, oil cost more than $100 for one barrel for the first time in two weeks. US stock markets went down. The S&P 500 index went down 0.41%. The Nasdaq Composite went down 0.89%. Oil prices went up at the same time as US President Donald Trump said Israel and Lebanon agreed to stop fighting for more time. Trump said the meeting was very good. The stop in fighting was for 10 days. Now it is for more time so leaders can talk. The US said it will help Lebanon be safe from Hezbollah. But the main reason for higher oil prices is the fight between the US and Iran in the Strait of Hormuz. Ships cannot pass through this waterway. Normally, one-fifth of the world''s oil and gas passes through here. Before the US and Israel started a war with Iran on February 28, 129 ships passed through every day. On Wednesday, only 9 ships passed through. On Tuesday, 7 ships passed. On Monday, 15 ships passed. Both countries are taking each other''s ships. The Pentagon said it took a ship with Iranian oil. This was the second time in less than one week. Trump said he told the US Navy to destroy any Iranian boats that put mines in the water. He said no ship can go in or out of the strait without US Navy permission. He said the strait is closed until Iran makes a deal. Iran''s Revolutionary Guard said it took two foreign ships. One ship was from Panama. One ship was from Greece. Iran said the ships did not have the right permits and changed their navigation systems. Greece said its ship was not taken and the captain still controls it. Analysts from a bank in Australia said the longer the strait is closed, the more money it costs. They think the US will stop first because of high costs. But they said there is a risk of a big war. The head of the International Energy Agency said the world has the biggest energy problem in history. He said 13 million barrels of oil are lost every day. He said there are big problems with important things. He warned that the war and the closed strait will cause the biggest energy crisis ever. He told governments to find other energy sources.
Conclusion
Now, oil prices are high and ships cannot pass through the Strait of Hormuz. The US and Iran are both stopping ships and taking them. The stop in fighting between Israel and Lebanon gives time for talks. But the big problem for energy is still in the Persian Gulf. Analysts and energy leaders warn of big money problems if the strait stays closed.