Crude oil prices continued to climb this past week with traders focusing more on potential threats to international supply and less on dwindling demand in a weakening economy—at least temporarily.
A US Navy refueling ship fired on a small fishing boat July 16 in the Strait of Hormuz, killing one unarmed fisherman and wounding two others. The Navy said the ship first fired warning shots to signal the boat to stay clear, and then fired at the fishing vessel when it failed to comply. The fishing boat is registered to an UAE-based company but was crewed by Indian nationals. Both the Navy and UAE officials are investigating the incident.
The event highlights the increasing tension among Iran, the US, and European countries in the conflict over Iran’s proposed nuclear program. Iran has once again threatened to interrupt oil traffic through the Strait of Hormuz; although unlikely, this is enough to raise market concerns.