Kuwait Raises May Crude Oil Prices To Asia By $17 Per Barrel

The U.S.-Iran negotiations collapsed, and Trump announced the blockade of the Strait of Hormuz, causing a sharp rise in geopolitical risks and pushing oil prices higher.

On April 13, according to a pricing document obtained by Reuters on Monday,Kuwait has raised the official selling price (OSP) for its Kuwait Export Crude bound for Asia in May to $17 per barrel above the Oman/Dubai average. The producer has also increased the OSP for Kuwait Super Light crude for May loadings to $17 per barrel above the Oman/Dubai average.

Previously, U.S. President Trump announced a blockade of the Strait of Hormuz, sparking strong market concerns over the disruption of the Middle East's crude oil transportation channel. As of the time of writing, WTI crude oil prices have risen by more than 7%, and Brent crude oil has increased by over 6.7%.

According to China Central Television, the U.S. Central Command announced on the 12th that it will impose a blockade on all maritime traffic entering and exiting Iranian ports starting at 10 a.m. Eastern Time on April 13, covering all Iranian ports in the Arabian Gulf and the Gulf of Oman. This is the most aggressive step taken by Trump since the military action against Iran launched in late February. According to the Lloyd's Shipping Daily, after the blockade order was issued, shipping in the Strait of Hormuz immediately came to a standstill, with at least two vessels originally departing the strait turning back.

Some analysts support the blockade. Former senior U.S. diplomat Dennis Ross believes that this move cuts off Iran's exports and sources of income, creating a balance of power. Former diplomat Richard Haass said that an "open to all or closed to all" policy helps to build international consensus.

However, more analysts are skeptical about the actual effectiveness.Esfandyar Batmanghelidj, an expert from a British think tank, pointed out that Iran is already in a state of "self-blockade," and the impact of the blockade on its budget is limited. Moreover,Iran has multiple alternative overland routes.Currently, whether the fragile ceasefire agreement signed two weeks ago can hold after the blockade becomes the biggest variable influencing global energy markets.