West Texas Intermediate crude, the main US benchmark, rose 11.9% today to $112 a barrel. This is its highest level in 2022 after Russia’s attack on Ukraine. At the beginning of this year, WTI was at $54 per barrel.
Oil markets are closed for trading today due to the Easter holiday, but rising crude oil prices are likely to lead to further market declines, fuel shortages and food security concerns. Let us tell you that due to the Iran war, oil and fuel prices have increased rapidly across the world.
‘America can easily open the Strait of Hormuz’
President Donald Trump has claimed in a post on ‘Truth Social’ that given a little more time, America could easily open the Strait of Hormuz, take the oil and make huge profits. He said that it would prove to be “a potential ‘treasure’ for the world.”
These latest comments by Trump are in sharp contrast to the statement he made earlier this week, in which he had said that America’s allies should come forward and reopen the strait so that they can get oil.
This situation has arisen when Iran has blocked this important trade route on a large scale after the US-Israeli attack, due to which energy prices are increasing rapidly. Trump continues to warn that if Iran does not reopen this waterway, he will intensify his attacks on Iran’s civilian infrastructure.
‘Prices of food items will increase further’
The Food and Agriculture Organization of the United Nations (FAO) said in a press release that worldwide food prices in March reached their highest level since September last year, and could rise further if the war continues.
The FAO food price index increased by 2.4% in March compared to February. This food agency of the United Nations said that this figure is 1% more than the level of a year ago.
“If the conflict drags on for more than 40 days and input costs remain high while farmers’ profits remain low, farmers will have to choose between: farming with less inputs, planting fewer crops, or growing crops that require less fertilizer,” said Maximo Torero, chief economist at FAO. “These choices will impact future yields, and will determine our food supply and commodity prices for the rest of this year and throughout next year,” he added.
Prices of vegetable oils increased by 5.1%, the third consecutive month of increase. Meat prices increased by 1%, dairy products by 1.2% and sugar prices by 7.2%.
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