Lammy: Iran blocking Strait of Hormuz would be ‘catastrophic mistake’
Foreign secretary David Lammy has warned Iran that blocking the crucial Strait of Hormuz shipping lane would be a “mistake” after the nation vowed repercussions following the US’ attacks.
Lammy told the BBC this morning: “It would be a catastrophic mistake. It would be a mistake to blockade the Strait of Hormuz.”
The foreign secretary said he believed the country’s supreme leader Ayatollah Ali Khamenei “gets that” preventing access through the waterway would be a crucial misstep.
The strait, which transports around 20 million barrels of oil each day, is situated in Iran’s territorial waters and 21 miles wide at its narrowest point.
Around one-fifth of global oil supplies and a third of liquefied natural gas travel through it.
Iran has promised “everlasting consequences” after seven US stealth bombers dropped 14 30,000 pound-bunker-busting bombs on Iran’s nuclear facilities on Sunday morning.
Lammy warned the Iranian regime against retaliatory action against the US.
“I was crystal clear to the Iranian: it would be a huge, catastrophic mistake to fire at US bases in the region at this time. We have forces in the region at this time,” the foreign secretary said.
Brent crude to spike if Iran acts
Banking juggernaut Goldman Sachs has warned the price of Brent crude oil could hit $110 per barrel if oil flows through the Strait of Hormuz were disrupted.
If the critical waterway was to have it supply halved and remain down by 10 per cent for the following 11 months, prices would average around $95 a barrel in the fourth quarter, Goldman said.
Prediction markets reflect a 52 per cent probability of Iran closing the Strait of Hormuz, Goldman said citing data from Polymarket.
The head of the International Monetary Fund (IMF) has warned that escalating tensions in the US could “triggered impact of downward revisions in prospects for global growth”.
IMF managing director Kristalina Georgieva said: “We are looking at this as another source of uncertainty in what has been a highly uncertain environment”.
Following the US’ strikes on Iran, the price of Brent spiked 5.7 per cent to $81.40 a barrel – a five month high.
Gains later dipped to around two per cent at near $79.