MW Global oil prices climb back above $110 a barrel after disputed report of Iran strike on U.S. warship
By Isabel Wang and Barbara Kollmeyer
Oil is off to a volatile start to the week on a disputed report of a strike on a U.S. Navy ship in the Strait of Hormuz
Investors were reacting Monday to the continued uncertainty over the shutdown of ship traffic through the Strait of Hormuz
Global oil prices were surging back above $110 per barrel on Monday as investors weighed conflicting reports about a possible Iranian strike on a U.S. warship in the Strait of Hormuz.
Two Iranian missiles struck a U.S. Navy ship after it "violated security protocols for transit and navigation with the intent to pass through the Strait of Hormuz" and ignored warnings from the Iranian navy, an account for Iran's Fars News Agency said in a post on X.
"The Islamic Republic of Iran has repeatedly announced that any passage through the Strait of Hormuz is not possible without obtaining official permission from Iran, and any disregard for this warning will be met with a decisive response from the armed forces," said the Fars report.
U.S. Central Command denied that report in an X post, stating: "No U.S. Navy ships have been struck. U.S. forces are supporting Project Freedom and enforcing the naval blockade on Iranian ports."
The latest development came after President Donald Trump said in a post on Truth Social over the weekend that the U.S. would launch a new effort starting Monday called Project Freedom to help get ships from neutral countries moving through the vital waterway.
Brent crude futures for July delivery (BRN00) (BRNN26) were rising 2.5% to $110.85 a barrel. The global oil benchmark rose as much as 5% to trade above $114 on Monday early morning but has since pared those gains.
West Texas Intermediate crude saw its June contract (CL00) (CLM26) climb 0.5% to $102.48 a barrel, according to FactSet data.
Trump also said there had been "very positive discussions" with Iran, which "could lead to something very positive for all," although he didn't provide details on either development.
Brent crude futures topped $125 a barrel last Thursday, at nearly a four-year high, but also closed lower on the month.
In a largely symbolic move, the members of the Organization of the Petroleum Exporting countries and its allies, known as OPEC+, announced Sunday that they would raise daily oil output by 188,000 barrels as the conflict continues to stifle global oil supply. That output increase doesn't count production by the United Arab Emirates, which dropped out of OPEC and OPEC+ effective May 1.
"OPEC announced a slight increase in production quotas, but with many members struggling to move oil due to near-closure conditions in the Strait of Hormuz, the decision is unlikely to impact short-term price dynamics," said Ipek Ozkardeskaya, senior analyst at Swissquote. "In the longer run, more supply should mean lower prices, but for now the global economy will continue to grapple with high energy costs."
Geopolitical uncertainty and hectic diplomacy between the U.S. and Iran suggest that volatility in oil prices will persist, she added.
-Isabel Wang -Barbara Kollmeyer
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May 04, 2026 10:29 ET (14:29 GMT)
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