Global crude oil prices climbed more than 3% following fresh military exchanges between the United States and Iran in the Middle East, marking a significant escalation in their ongoing six-month conflict.
Crude oil markets responded sharply on Monday to renewed military confrontations in the Strait of Hormuz. Brent crude futures increased by $2.87 per barrel, or 3.26%, reaching $90.97, while US West Texas Intermediate crude rose $2.91, or 3.49%, to $86.31. The price movement followed US military strikes on two launcher installations at Iran's Larak Island on Sunday, the first confirmed American action against Iran since late July. According to Iranian media reports citing the Revolutionary Guards, Tehran responded by attacking two American air bases located in Jordan.
Market analysts attributed the price gains to heightened concerns about potential disruptions to global oil supplies. UBS analyst Giovanni Staunovo noted that investors were monitoring whether tensions would stabilize or continue escalating. However, some market observers, including analysts from Saxo Bank, suggested that thin trading volumes resulting from a UK public holiday may have amplified the price movement.
Disputes emerged regarding the scope of military operations. President Trump claimed via social media that Iran's Kharg Island energy facility was being heavily damaged, accompanied by an AI-generated video, though no independent verification supported this assertion. Iran countered by denying any attack on the island and stating that oil operations remained unaffected. Meanwhile, the UK Maritime Trade Operations agency reported that a tanker sustained a direct hit from a projectile while transiting the strait on Saturday, and vessel traffic data showed commodity ships crossing the waterway had dropped to just five daily.
Mediation efforts remain deadlocked as parties attempt to restore freedom of navigation through the Strait of Hormuz, which historically transported roughly one-fifth of global oil supplies before hostilities commenced in late February. The US Treasury announced plans for additional sanctions against Iran, with Secretary Scott Bessent indicating weekly measures were anticipated. Despite Monday's gains, both crude benchmarks faced modest August losses, declining over 4% the previous week.