Global oil prices climbed sharply on Monday after renewed military action between the United States and Iran raised fresh concerns about the security of energy shipments through the Strait of Hormuz, one of the world’s most important oil transit routes.
Brent crude futures rose by $3.10, or 4.08 percent, to $79.11 a barrel during early trading. U.S. West Texas Intermediate crude also gained $2.95, or 4.11 percent, to reach $74.36 a barrel, as traders reacted to the growing risk of supply disruptions.
The latest rally followed a new wave of military strikes that heightened tensions in the Middle East. The U.S. Central Command said American forces carried out precision attacks on dozens of Iranian targets on Sunday. In response, Iran’s Revolutionary Guards announced on Monday that they had targeted U.S. military bases in Kuwait and Bahrain.
The renewed conflict has again shifted investors’ attention to the Strait of Hormuz, a narrow waterway that carries a significant share of the world’s oil and liquefied natural gas exports. Before the conflict erupted at the end of February, around one fifth of global oil and LNG supplies passed through the strait.
Although U.S. President Donald Trump said on Sunday that commercial shipping through the waterway remained open, Iran had earlier declared the strait closed after accusing a vessel of travelling along an unauthorised route before it was struck.
Shipping activity has already shown signs of slowing. Data from ship tracking firm Kpler showed that only six vessels crossed the Strait of Hormuz on Sunday, marking the lowest daily traffic in five weeks and adding to market concerns about future supplies.
The latest exchange of attacks has also cast doubt over the future of an interim agreement reached between Washington and Tehran last month. The deal had aimed to reopen the strait and create space for another 60 days of negotiations to help end the conflict.
Despite the agreement, the global oil market has yet to fully recover. The International Energy Agency said in its latest monthly report that worldwide oil supply increased by 4.1 million barrels per day in June. However, production remained 9.4 million barrels per day below levels seen before the war began.
Market analysts said investors are still weighing whether the latest violence marks a temporary setback or the start of a broader conflict. Analysts at ANZ said hopes for a quick easing of tensions had faded after the weekend’s military action.
IG market analyst Tony Sycamore said the moderate rise in prices suggested traders still believed the latest developments reflected an escalation within a fragile truce rather than a complete breakdown of efforts to keep the conflict contained.
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