Media365
Global oil prices climbed more than 3 per cent on Monday after Iran expanded its military strikes to Gulf states following fresh US attacks, reviving fears of supply disruptions through the Strait of Hormuz and adding fresh uncertainty to global energy markets.
Brent crude futures for September delivery rose $2.46, or 3.24 per cent, to $78.47 a barrel, while US West Texas Intermediate (WTI) crude futures for August delivery gained $2.36, or 3.30 per cent, to $73.77 a barrel in early trade.
The sharp move came after Tehran widened its military response over the weekend, launching strikes on Qatar and the United Arab Emirates after the United States carried out another round of attacks on Iranian targets. The latest escalation has fuelled concerns that the conflict could disrupt oil exports from the Gulf and threaten shipping through the Strait of Hormuz, a vital artery for global energy trade.
The Strait of Hormuz handles roughly a fifth of the world’s oil consumption and remains one of the most strategically important maritime chokepoints for crude and liquefied natural gas exports.
US President Donald Trump said that the Strait of Hormuz remained open to commercial shipping. However, Iran had earlier declared that it had closed the waterway after claiming that a vessel travelled on an unauthorised route and was subsequently struck.
According to ship-tracking data from Kpler, only six vessels transited the strait on Sunday, the lowest daily traffic recorded in five weeks. The decline has heightened fears that prolonged hostilities could significantly affect global energy supplies.
The renewed conflict has also cast doubt over the future of an interim agreement signed between Washington and Tehran last month. The deal had sought to reopen the Strait of Hormuz and pave the way for broader peace negotiations over a further 60-day period.
While the agreement had helped improve oil production, supplies remain well below levels seen before the conflict. The International Energy Agency (IEA) said in its monthly report released on Friday that global oil supply increased by 4.1 million barrels per day in June but remained 9.4 million barrels per day below pre-war levels.
Market participants said the latest escalation has weakened expectations that tensions would ease quickly.
