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The Impact of Lebanon Fighting on Oil Prices Oil prices have begun rising again as an agreement between the United States and Iran hangs in the balance. Brent crude, the international benchmark, rose 0.65 percent on Friday, after falling as much as 0.9 percent earlier in the day, as traders continued to weigh the practical effect of the US-Iran memorandum of understanding on ending their war and reopening the Strait of Hormuz. Brent Crude Price Movement Brent futures for August delivery stood at $80.37 as of 06:30 GMT, taking the benchmark above the $80 threshold for the first time since Wednesday, after an earlier slide spurred by an uptick in commercial vessels transporting energy supplies through the strait. The Data Analysis: Traffic Through the Strait of Hormuz Despite the transits, traffic in the waterway remains a fraction of what it was before the war, when the channel saw 120-130 transits a day. More than 500 vessels are estimated to be waiting to exit the Gulf through the strait, which in peacetime carries about one-fifth of the global oil supply. The Impact Analysis: Safety Concerns and Shipping Industry While Iran and the US have committed to reopening the waterway, ship operators have expressed doubt about the safety of their vessels and crew after nearly four months of threats and attacks. At least 46 attacks have been carried out against ships in the vicinity of the channel since the start of the conflict in late February, killing 14 seafarers, according to the International Maritime Organization. The Prediction: Future Outlook for Oil Prices The situation remains volatile with concerns over safety and security for ships and crew. The International Association of Independent Tanker Owners (INTERTANKO) has called for greater clarity on the practical steps needed to facilitate safe passage through the waterway. Without clarity on these issues, ships will be unsure whether to transit the Strait of Hormuz, which could further impact oil prices.

The Strait of Hormuz Blockade The centre of the Strait of Hormuz is blocked with about 80 mines that will need clearing for normal shipping to resume, the independent tanker owner trade body has said. Mines and Maritime Challenges Several vessels began to exit the Gulf through the key maritime chokepoint on Thursday, after the signing of a memorandum of understanding between the US and Iran. However, shipping is not expected to return to normal for some time, even if the ceasefire lasts, because of the mines and other obstacles, underlining the continuing challenges facing global trade. Impact on Shipping and Trade “The main route … through the middle of the strait of Hormuz, that’s closed, that’s dangerous,” said Phil Belcher, marine director at Intertanko, the association of independent tanker owners. “The latest figure we had was that there’s 80 mines in the strait of Hormuz. It’s an enormous amount and it’s going to take some time to clear.” Risk of Collision and Disruption With high numbers of vessels trying to pass through narrow areas of the strait, the shipping industry is warning of the risk of collision. This risk is intensified by the “signal jamming” that Iran has reportedly carried out during the conflict, where electronic interference has prevented ships’ navigating and positioning systems from operating, leaving them effectively sailing blind. Future Outlook Nearly 600 vessels are believed to still be in the Gulf, where they have been anchored since February, meaning the backlog will take time to clear. Richard Meade, editor-in-chief at maritime data provider Lloyd’s List, said: “We are in uncharted territory. I don’t think [shipping in the strait] is getting back to normal this year.”