Oil prices have risen sharply in response to escalating military actions between the United States and Iran in the Middle East.
International oil prices surged approximately 3% on Monday, with Brent crude surpassing the $90 per barrel threshold. This increase is driven by the ongoing intensification of US-Iran tensions and disruptions to oil transport through the Strait of Hormuz.
As of 06:12 GMT, Brent crude futures were up $2.77, or 3.14%, at $90.87 a barrel, marking the highest level since June 11. Last week, Brent posted a cumulative gain of 15.9%, its largest weekly increase since April, and this upward trend has continued into the current week.
US West Texas Intermediate (WTI) crude rose $2.35, or 2.85%, to $84.84 a barrel, reaching its highest point since June 12. The front-month contract gained 15.5% last week, its strongest weekly performance since early March.
The conflict in the Middle East escalated significantly over the weekend. The United States conducted airstrikes on Iran for the ninth consecutive night, while US allies Kuwait and Bahrain reported attacks from Iranian forces.
Analysts at ING stated in a report on Monday: "The conflict in the Gulf region continues to intensify, with ICE Brent crude breaking directly through the $90 per barrel mark today."
"Both the US and Iran continue to strike each other, resulting in significant casualties. If the situation spirals further out of control, a wider exchange of fire could erupt in the Gulf region."
Iran's Islamic Revolutionary Guard Corps claimed on Monday that two tankers attempting to pass through a southern route in the Strait of Hormuz—an area it had designated as dangerous—exploded and lost navigational capability. Iran accused the US military of encouraging vessels to use this route.
Reuters could not immediately verify the details of the reported incident.
In recent days, both sides have targeted maritime shipping. The US has declared a maritime blockade on Iranian ports, while Iran has stated it will strike any vessel violating navigation rules in the Strait of Hormuz. Approximately one-fifth of global oil trade passes through this strait.
The United Kingdom Maritime Trade Operations centre reported a vessel on fire northwest of Quinzhar, Oman, early Monday.
Barclays analyst Amarprit Singh noted in a report: "It will take several days to weeks for the market to gauge the scale of stable crude exports from the Middle East under the ongoing dual blockade."
"Based on the current situation, the oil market is still underestimating the risk of inventory impacts from the conflict. Unlike the early stages of the conflict, global crude inventories are now at their lowest levels in nearly five years."
Data from the London Stock Exchange Group (LSEG) shows that only four vessels transited the Strait of Hormuz on Sunday, a significant drop from eight the previous day. The data also indicates that since last Friday, at least three product tankers and one very large crude carrier have entered the strait to load crude oil.
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