Crude oil prices moved higher on Monday after US President Donald Trump stated that Iran would "pay a price" for the deaths of three American soldiers, while Yemen's Houthi rebels announced a maritime blockade against Saudi Arabia.
The international benchmark Brent crude futures were last quoted at $89.41 per barrel, up 1.5%. US West Texas Intermediate (WTI) crude futures rose 1.1% to $83.41 per barrel.
In a post on his Truth Social platform, Trump declared: "Every time Iran kills an American soldier, they will pay a price many times over! This directive has been given to War Secretary Pete Hegseth, Chairman of the Joint Chiefs of Staff Daniel Caine, and all military leaders."
This followed US confirmation that at least three service members were killed in recent clashes with Iran, which had initially sent Brent crude soaring nearly 4% overnight, briefly surpassing $90 per barrel. Prices later moderated after Iranian foreign ministry spokesman Esmail Baghaei indicated that negotiations with the US could be possible based on Tehran's interests.
Concurrently, Iran's allies, the Houthi rebels in Yemen, announced a maritime blockade against Saudi Arabia on Monday. This action could further exacerbate oil supply disruptions stemming from Iran's attacks on tankers in the Strait of Hormuz. The Houthis have repeatedly threatened to close the Bab el-Mandeb Strait, a critical chokepoint linking the Red Sea to global markets.
Saudi Arabia has already been diverting millions of barrels of oil per day via a pipeline to export terminals on the Red Sea coast. These exports have served as a crucial buffer for the global crude market during the US-Iran conflict.
The US has conducted airstrikes against Iran for the ninth consecutive night in retaliation for multiple Iranian attacks on tankers transiting the Strait of Hormuz. Tehran has been attempting to force vessels to pass through the strait via its territorial waters. This month's attacks have resulted in the deaths of at least two sailors and injuries to over a dozen others.
According to an incident report issued on Sunday by the United Kingdom Maritime Trade Operations (UKMTO), a product tanker anchored near the Omani coast was struck by a projectile over the weekend, causing a fire on board. The UKMTO stated the crew safely abandoned the vessel and were rescued by a tugboat.
The United Nations' International Maritime Organization identified the tanker as the Malta-flagged vessel "Kavomaleas".
In response to US airstrikes, Iran launched missiles at US allies in the Middle East. Reports indicate Tehran conducted a second attack over the weekend on a power and desalination plant in Kuwait, striking the same target twice within two days. Kuwait relies heavily on such facilities for its drinking water.
Data from the American Automobile Association (AAA) shows that as US crude prices have surged 18% this month, gasoline prices climbed back to $4 per gallon on Monday. The last time prices reached this level was on June 17, when the US and Iran signed an interim agreement aimed at reopening the strait and halting hostilities.
Amrita Sen, founder and research director at Energy Aspects, suggested that a significant slowdown in shipping through the Strait of Hormuz, coupled with the drawdown of global inventories, could push oil prices above $100 per barrel.
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