Oil war

THE temporary ceasefire brokered by Pakistan between the United States and Iran prevails but its indirect violation has effectively turned the conflict into a virtual oil war with devastating impact on the global oil prices and shortages of the commodity. The stubborn attitude of the two countries on the double blockade of the strategic Hormuz water channel caused six per cent hike in the prices of oil in a single day on Wednesday as the international benchmark oil contract Brent crude for June delivery rose to $117.81 a barrel, its highest level since the fragile ceasefire between the US and Iran came into effect. According to experts, the market is increasingly shifting towards a view that no longer expects a quick and lasting peace, nor an immediate reopening of the Strait of Hormuz. As things stand, the situation is unlikely to change any time soon as the US considers its strategy of naval blockade of Iranian ports as the most effective tool to tighten screws on its economy, forcing it to accept a non-nuclear deal. In a worrisome development, Trump told oil executives that the blockade could extend for months more. As per Iranian Students’ New Agency, in a sign of the economic toll the war is taking on Iran’s economy, its currency fell to a record low on Wednesday. Inflation for the month from March 20 to April 20 was 65.8%, the central bank said, a trend likely to be exacerbated by the currency’s plunge. Iran’s parliament speaker, Mohammad Bagher Ghalibaf, has dismissed the impact of US measures targeting Iranian oil exports, saying the restrictions have not disrupted production as claimed and have instead contributed to higher global prices. He warned “They push the blockade theory and cranked oil up to $120+. Next stop: 140.” Tehran might have demonstrated resistance in countering the US blockade as both production and exports continue but its impact on the Iranian economy (and that of the global economy) cannot be denied and there is a big question mark whet