HONG KONG – Oil prices surged yesterday on a re-escalation of hostilities in the Middle East war after Iran closed the Strait of Hormuz at the weekend, just a day after reopening it, citing the United States’ blockade of its ports.

However, lingering hopes for a deal to end the seven-week crisis continued to support Asian equities, even as Tehran said it was not currently planning to attend peace talks.

Crude plunged Friday while US stocks rallied after the Islamic republic said it would again allow ships to pass through the waterway through which a fifth of global oil and LNG gas usually passes  citing the ceasefire between Israel and Lebanon.

US President Donald Trump told AFP that “we’re very close to having a deal”, adding that there were “no sticking points at all” left with Tehran, though Iran quickly pushed back, saying its stockpile of enriched uranium would not be transferred “anywhere”.

US benchmark West Texas Intermediate dived more than 11% and Brent shed nine percent.

But both contracts jumped sharply yesterday, days before the end of a two-week ceasefire, owing to the ongoing US blockade and after an American destroyer fired on and seized an Iranian ship that tried to evade it. Tehran warned it would retaliate.

The blockade of Iranian ports has been a significant sticking point in negotiations between the two countries, and state broadcaster IRIB cited Iranian sources as saying “there are currently no plans to participate in the next round of Iran-US talks” in Pakistan. – Nampa/AFP