Oil extends rally as market focuses on Hormuz disruption

MOSCOW, July 21. /TASS/. The current global geopolitical situation, including the Houthi naval blockade of Saudi Arabia and the risk of the Bab al-Mandab Strait’s closure, is increasing the appeal of the Northern Sea Route as an alternative to traditional transport corridors, Konstantin Kosachev, deputy chairman of the Russian Federation Council (the upper house of parliament), said.

"Current geopolitical developments around the world are further boosting demand for the Northern Sea Route, especially amid a new escalation in the US-Iran conflict. Shipping through the Strait of Hormuz, which handles about 25% of global oil supplies and 20% of liquefied natural gas deliveries, has once again been disrupted.

Rising tensions between Saudi Arabia and the Yemen-based Ansar Allah movement, also known as the Houthis, are creating the risk of the Bab al-Mandab Strait being closed as well. This is further increasing the appeal of the Northern Sea Route as an alternative to traditional transport corridors," he said at a roundtable on the development of the Northern Sea Route hosted by the Federation Council Committee on Foreign Affairs.

According to Kosachev, "the absence of political risks" is one of the factors making the Northern Sea Route attractive. "The entire Northern Sea Route runs through the territorial waters of a single country, Russia. However, this is precisely why we are facing artificial barriers such as sanctions, which since 2022 have changed the practice of resolving maritime disputes and the way infrastructure operates," he added.

International mediators have proposed a 10-day ceasefire between the United States and Iran, according to a senior Iranian official cited in reports. The measure is described as intended to reduce hostilities and allow renewed talks on a prior interim agreement.

Both sides are assessing next steps in the current regional security situation.

Reports indicate that a US-Iran ceasefire has broken down amid renewed fighting, with the potential impact of mediation efforts by Pakistan, Qatar, and Oman remaining unclear. Earlier diplomatic steps included a June memorandum of understanding between the parties for further negotiations and talks hosted in Geneva in February.

The summary also references Europe’s historical role in diplomacy, including the 1814-15 Congress of Vienna.

Donald Trump stated in a Fox News interview that his representatives had spoken with Iranian officials an hour earlier and that those officials wanted to make a deal to end the conflict, though he noted they had broken prior agreements and expressed uncertainty about whether one would be reached.

He added that people do not want to die and that Iran would need to proceed carefully to avoid further losses. The remarks come amid an ongoing US-Iran conflict that has involved casualties and shipping disruptions in the Strait of Hormuz, with some social media users criticizing the repetition of similar statements.