Oil prices climbed more than 4% on Monday after renewed military strikes by the United States and Iran heightened concerns over energy shipments through the Strait of Hormuz. The latest escalation has increased uncertainty in global energy markets and raised fears of possible supply disruptions.
Renewed Conflict Fuels Market Uncertainty
Brent crude futures gained $3.10, or 4.08%, to reach $79.11 per barrel by 0325 GMT. Meanwhile, US West Texas Intermediate crude rose $2.95, or 4.11%, to $74.36 a barrel.
According to the US Central Command, American forces carried out another wave of precision strikes on Sunday, targeting dozens of locations across Iran. In response, Iran’s Revolutionary Guards announced missile and drone attacks on US military bases in Kuwait and Bahrain.
US President Donald Trump stated that the Strait of Hormuz remained open to commercial shipping. However, Iran maintained that it had closed the strategic waterway after a vessel allegedly violated its approved route and was subsequently struck.
Before the conflict began in late February, nearly 20% of the world’s oil and liquefied natural gas passed through the Strait of Hormuz. Ship-tracking data from Kpler showed that only six vessels crossed the route on Sunday, marking the lowest traffic level in five weeks.
Analysts Warn of Growing Risks
The renewed fighting has also cast fresh doubt on the future of the interim US-Iran agreement signed last month. The accord aimed to reopen the Strait of Hormuz and create a 60-day window for negotiations to end the conflict.
The International Energy Agency reported that global oil supply increased by 4.1 million barrels per day in June. Nevertheless, production remained 9.4 million barrels per day below pre-war levels.
Furthermore, ANZ analysts said hopes for a quick resolution had weakened after tensions intensified over the weekend. IG market analyst Tony Sycamore noted that the moderate rise in oil prices suggested investors still viewed the latest violence as an escalation within a fragile truce rather than a complete breakdown of the ceasefire. However, he cautioned that the situation could change rapidly depending on future developments.
