The boss of Abu Dhabi’s state-owned oil company has warned that the Strait of Hormuz is “not open”, despite the US-Iran ceasefire agreed earlier this week.
The comments from Sultan Al Jaber, chief executive officer of the Abu Dhabi National Oil Company (Adnoc), came as uncertainty over the durability of the truce pushed the price of US oil above $100 a barrel on Thursday.
Al Jaber said passage through the vital waterway was still dependent on “permission, conditions and political leverage” by Iran. He said energy security and global economic stability depend on the strait being opened “fully, unconditionally and without restriction”.
The Strait of Hormuz is one of the world’s most important energy shipping routes, and any disruption there can quickly feed through to global oil markets. Al Jaber’s remarks underscored how quickly ceasefire hopes were being tested by concerns that the geopolitical situation could remain unstable.
Market moves on Thursday reflected those worries. Traders and investors questioned whether the ceasefire could hold, and that uncertainty added to pressure on prices. The rise in US oil prices above $100 a barrel marked a sharp response to the risk that tensions in the region could again threaten supply routes.
Adnoc, which is owned by the Abu Dhabi government, is one of the key players in the Gulf energy sector. Al Jaber’s intervention highlighted the importance of the Strait of Hormuz not only to oil producers in the region, but also to the wider world economy.
The warning suggests that even after a ceasefire is announced, the practical realities of movement through the strait may remain a source of concern. For energy markets, that means the focus is likely to stay on whether the agreement can be maintained and whether shipping through the waterway can resume without restriction.
Thursday’s price increase showed how sensitive oil markets remain to developments in the Middle East. With the ceasefire still facing questions, the outlook for supply, transport and price stability continues to depend heavily on events in and around the Strait of Hormuz.
