"Avoid Iranian waters"…Oil rises after U.S. warning

On the 9th (local time), the U.S. government issued a maritime alert instructing U.S.-flagged vessels transiting the Strait of Hormuz to stay as far away as possible from Iranian territorial waters. The news heightened tensions in the Middle East and nudged international oil prices higher.

The Strait of Hormuz is a key trade route through which Middle Eastern crude is shipped. Iran has repeatedly threatened to close the strait whenever tensions with the United States flare.

In the alert, the U.S. Department of Transportation said Iranian forces have used small boats and helicopters to try to force U.S. vessels into Iranian territorial waters, adding that a similar incident occurred on the 3rd.

In particular, the department noted that commercial vessels passing through the Strait of Hormuz have long been exposed to the risk of “being hailed, questioned, boarded, detained, and seized by Iranian forces.” It also removed the previous wording stating that there had been “no specific threat to U.S.-flagged vessels in the area.” The alert said that if hailed by Iranian forces, ships should state they are underway in accordance with international law, and that they should refuse demands to board if possible, while refraining from physical resistance.

Although the United States and Iran recently resumed talks in Oman for the first time in eight months, tensions persist. Against this backdrop, West Texas Intermediate (WTI) futures rose 1.3% from the previous day to top $64 a barrel. Bloomberg noted that “a risk premium that had faded for several days amid U.S.-Iran nuclear talks has returned.”

Reporter Han Myung-hyun wise@hankyung.com