Latest Development on US-Iran Situation: Iran Claims to Have Closed the Strait of Hormuz, US Responds Saying It Has Not Closed

BlockBeats News, March 3rd, Ebrahim Jabari, advisor to the commander of the Iranian Revolutionary Guard, stated that the Strait of Hormuz has been closed. Iran will fire at any vessel attempting to pass through and will attack oil pipelines and tanker routes. This is the most explicit warning from Iran since Saturday when they notified ships of the closure of this export passage. This action could disrupt one-fifth of global oil shipments and cause a substantial increase in crude oil prices. According to Fox News, the U.S. Central Command stated that the Strait of Hormuz is not closed, despite the claims made by the Iranian Revolutionary Guard. Iran is not patrolling the strait, and there is currently no evidence of them laying mines in the area.

The international crude oil settlement price surged significantly. By the end of the 2nd, the price of light crude oil futures for April delivery on the New York Mercantile Exchange rose by $4.21 to close at $71.23 per barrel, a 6.28% increase. U.S. Secretary of State Pompeo stated on Monday that the U.S. will take action to ease the surge in energy prices caused by the Iran conflict. Pompeo mentioned that U.S. Treasury Secretary Mnuchin and Energy Secretary Brouillette will announce related plans on Tuesday.

In addition, U.S. State Department officials have called on American citizens to "depart immediately" from a dozen countries and regions in the Middle East. These locations include Bahrain, Egypt, Iran, Iraq, Israel, the West Bank and Gaza, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, the UAE, and Yemen. According to CNN, a senior U.S. official revealed that the U.S. is preparing for a "major attack" on Iran within the next 24 hours.

Former U.S. Treasury Secretary Yellen stated that the Iran conflict is making the Federal Reserve more inclined to stand still. The duration of the impact of the Iran conflict on the oil market will determine how much of a blow it will deliver to U.S. economic growth and how much inflation pressure it will bring, making the Fed's job more complicated. According to CME's "FedWatch," the probability of the Fed maintaining interest rates in March is 97.5%, and the market is still betting on a policy standstill in the near term. JPMorgan Chase CEO Dimon said there would be no serious inflation if the Iran conflict does not escalate. The current situation will lead to a slight rise in natural gas prices. The U.S. Dollar Index rose significantly by 0.79% on March 2nd, closing at 98.382 in the forex market.