United States: Oil prices rose by more than $1 a barrel on Monday after US forces struck Iranian launchers on Larak Island in the Strait of Hormuz and Iran responded by attacking US military bases in Jordan, raising renewed concerns over crude supplies and shipping through the strategic waterway.
Brent crude futures gained $1.08, or 1.23%, to $89.18 a barrel at 0040 GMT, while US West Texas Intermediate crude rose 92 cents, or 1.10%, to $84.32.
The US strikes on Sunday were the first known American attacks on Iran since late July. A US official said two Iranian launchers on Larak Island had been preparing to fire rockets carrying sea mines into the Strait of Hormuz.
Iran’s Islamic Revolutionary Guard Corps subsequently said it had attacked two US air bases in Jordan with ballistic missiles.
The renewed confrontation comes as oil markets had begun to price in a gradual recovery in shipping through the Strait of Hormuz following weeks of disruption.
How is the conflict affecting oil supplies and shipping?
The Strait of Hormuz is a critical route for global energy supplies, with about one-fifth of the world’s oil flows passing through the waterway before the conflict began in late February.
Shipping data showed that the number of visible commodity vessels crossing the strait fell to around five per day over the weekend as operators remained cautious following attacks and heightened military tensions.
The United Kingdom Maritime Trade Operations also reported that a tanker was struck by a projectile while travelling inbound through the strait on Saturday.
Analysts said the renewed escalation could reverse recent improvements in market sentiment if further fighting disrupts tanker movements or threatens crude exports from Gulf producers.
IG market analyst Tony Sycamore said it was unclear whether the latest escalation would last days or weeks.
Could oil prices rise further?
Market analysts are closely watching technical price levels as renewed tensions increase the risk of further gains.
Sycamore said a move by WTI above resistance around $85.80-$85.90 a barrel could open the way towards $87.69 and potentially July’s $93.50 high.
Despite Monday’s rise, Brent and WTI remain on course for modest monthly declines in August after both fell more than 4% last week.
The market is also monitoring efforts to offset potential supply disruptions. US President Donald Trump said oil from a recent deal with Venezuela would be used to replenish the US Strategic Petroleum Reserve, which is near its lowest level in 44 years.
The latest price increase highlights the oil market’s sensitivity to developments around the Strait of Hormuz, where any further military escalation could affect global crude supplies and commercial shipping.