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The price of oil surged on Sunday night following President Donald Trump's announcement that the U.S. Navy would block the Strait of Hormuz, after the failure of peace negotiations with Iran in Islamabad, Pakistan.
U.S. crude rose by 8%, surpassing $104 per barrel, while international Brent oil increased by more than 7%, reaching $103 per barrel.
Wholesale gasoline prices also rose by 6%, and heating oil —an indicator of jet fuel prices— surged by 10% in early trading.
Trump made the announcement on Truth Social following the collapse of the high-stakes talks that lasted 21 hours.
"With immediate effect, the United States Navy, the best in the world, will begin the process of BLOCKING every single ship attempting to enter or exit the Strait of Hormuz," said Trump on Sunday.
This Monday, it was confirmed that the blockade is in progress, and it was stated that "the Iranian navy lies at the bottom of the sea." In a message, it was indicated that the United States has destroyed 158 Iranian vessels.
The blockade officially began this Monday at 10:00 a.m., as markets reacted with historic gains amid global energy uncertainty.
Analysts warn that the barrels prior to the closure of Hormuz will completely run out in a very short time if the situation does not change. It is highly likely that gasoline prices will rise again in the United States.
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