Washington, May 8: Oil prices rose on Friday after tensions escalated between the US and Iran with both sides exchanging fire in the Strait of Hormuz, the maritime chokepoint which accounted for a fifth of global energy supplies.

Following the development, global oil benchmark Brent Crude breached $101 a barrel, and WTI Crude crossed $95 per barrel. Trade through the Strait has remained virtually halted since the beginning of the conflict on February 28.

According to US President Donald three US Navy destroyers transiting the Strait were targeted by Iranian missiles and drones. The US retaliated by sinking the small Iranian boats involved in the attack. Trump warned of further military action, vowing to “knock them out a lot harder, and a lot more violently, in the future,” if Tehran does not sign a peace deal.

Currently a dual blockade is in place in the Strait of Hormuz. Iran has maintained its chokehold on the martime route, blocking ships of countries it consideres hostile and selectively allowing vessels of “friendly” countries to navigate through waters near its coastline by paying tolls.

In reponse, the US Navy blocked off ships accessing Iranian ports, and began mine clearing Operations to restore freedom of navigation along the routes designated by international law.

The naval restrictions have led global energy prices to spiral. Earlier, it had breached the $125 per barrel mark. This week, Lloyd’s List reported that Iran established Persian Gulf Strait Authority, a new government agency to formalise toll collection in the Strait.

Earlier this week, Secretary of State Marco Rubio said Operation Epic Fury was over, citing that the objectives of the campaign, centred around weakening Iran’s military capabilities, had been met. While prices slightly dipped after the Pakistan-brokered ceasefire was extended in late April, the incident highlight price volitility.

Trump announced Operation Project Freedom, an initiative to escort vessels though the Strait. However, it came to a halt in two days as Washington’s key security parters in the Gulf, Saudi Arabia and Kuwait, reportedly restricted access to key bases and their airspace citing concerns of escalation. While the ceasefire remains in effect, both sides have expressed their readiness to continue the war.-Agencies