Oil prices rose more than $1 a barrel on Monday after US forces struck an Iranian island and Tehran retaliated against American bases.
The renewed fighting increased concerns about crude supplies and commercial shipping through the strategically vital Strait of Hormuz.
Brent crude futures gained $1.08, or 1.23%, reaching $89.18 a barrel at 0040 GMT.
Meanwhile, US West Texas Intermediate crude rose 92 cents, or 1.10%, to $84.32 a barrel.
US forces struck two Iranian launchers on Larak Island on Sunday, marking the first known American strikes against Iran since late July.
A US official said the launchers were preparing to fire rockets carrying sea mines into the waterway.
Iran subsequently retaliated by attacking two US military bases in Jordan, according to Iranian media citing the Islamic Revolutionary Guard Corps.
Strait of Hormuz Disruption Raises Oil Market Risks
Market analysts warned that the latest exchange could prolong uncertainty surrounding the conflict and regional energy supplies.
“Looks like we are in another escalation phase,” said IG market analyst Tony Sycamore.
He added that the latest escalation could last days or weeks, making its impact difficult to predict.
The developments came as oil markets had started anticipating a gradual reduction in disruption around the Strait of Hormuz.
However, negotiations aimed at ending the conflict remain stalled, while mediators continue efforts to restore regular commercial shipping.
The Strait connects major Gulf oil producers with international markets and remains one of the world’s most important energy chokepoints.
Before the war began in late February, around one-fifth of global oil supplies moved through the waterway.
Shipping Activity Falls Amid Renewed Fighting
Visible commodity vessel traffic through the strait fell to about five ships daily over the weekend, according to shipping data.
Operators have remained cautious following attacks on commercial vessels, although the actual traffic level could be higher.
Some ships have reportedly switched off their automatic identification systems to avoid detection.
The United Kingdom Maritime Trade Operations also reported that a tanker was hit by a projectile while entering the strait on Saturday.
ANZ analysts said rising oil flows had recently helped ease concerns about supply disruptions.
Nevertheless, renewed military action could reverse that improvement if fighting disrupts vessel movements or threatens Gulf producers’ ability to export crude.
