Iran has threatened to block off the strait of Hormuz after the US seek to impose oil sanction on the Islamic republic. American President Donald Trump had threaten to punish compaines that corporate with Iran.
- President Trump has also urged Saudi Arabia to increase pump volume to prevent the surge of oil price due to Iranian sanctions.
The strait of Hormuz harbours over 30% of world’s oil supply.Donald Trump recently warned of punishments for companies that purchase oil from Iran, which triggered a retaliation from President Hassan Rouhani who threatened to halt exports of oil to neighbouring countries.
It is a major oil shipping route for Persian Gulf nations to the Arabian Sea.
Stephen Brenneck, an oil analyst at PVM Oil Associates, has cautioned that halting Iranian oil exports “would propel oil prices well into triple figures”.
In a research note published on Thursday, Mr Brenneck said: “Around 17 million barrels per day or 35 percent of all seaborne oil exports pass through the strategic waterway.
“Iran’s leadership is clearly adamant that the new situation created by the U.S. withdrawal from the nuclear pact will not go without consequences.
“This, in turn, should go a long way to ensuring that the geopolitical premium remains alive and well.”
In response, the Netherlands has expelled two Iranian diplomats from the country over threats by Iran to halt the export of oil to neighbouring countries.