Oil price today: Brent tops $91 as US-Iran strikes raise Strait of Hormuz supply fears

Oil prices surged by over 3.5% on Monday following renewed military strikes between the US and Iran, raising concerns of potential disruptions to global oil supplies. Brent crude prices rose $3.15, or 3.58%, to $91.25 a barrel, while US West Texas Intermediate (WTI) crude climbed $2.96, or 3.55%, to $86.36 a barrel. The increase came after US forces targeted Iran's Larak Island in the Strait of Hormuz on Sunday, marking the first known US strike on Iran since late July. Iran retaliated by attacking two US air bases in Jordan on Monday, according to Iranian media.

The ongoing conflict has raised fears of potential disruptions to oil shipments, as the Strait of Hormuz is a crucial route for global oil trade. UBS analyst Giovanni Staunovo noted that "renewed military strikes in the Middle East and concerns of further oil supply disruptions have lifted oil prices." Markets are now watching to see if the conflict intensifies or begins to stabilize, as any additional military action could heighten concerns about oil supply and drive prices even higher.

The Strait of Hormuz, which historically carries about one-fifth of global oil supplies, remains a focal point for oil markets. Negotiations to resolve the conflict have stalled, and shipping activity through the strait has decreased sharply, with only a few commodity vessels visible per day over the weekend. Additionally, a tanker was hit by a projectile while entering the Strait of Hormuz on Saturday.

The recent oil price jump was also influenced by lower trading volumes, with Saxo Bank analyst Ole Hansen attributing it to the UK's public holiday. President Trump made a claim about Iran's Kharg Island, stating that its major energy hub was "blown to smithereens," though there was no evidence to support this assertion. Iran denied any attacks on the island and stated that its oil operations were continuing.

The US is preparing to impose new secondary sanctions on Iran every week in response to the ongoing conflict. Treasury Secretary Scott Bessent revealed that these additional sanctions could further pressure Iran's economy and energy sector. Meanwhile, oil prices are expected to post monthly losses for August, despite Monday's sharp rally, as Brent and WTI had already declined more than 4% the previous week, marking their first weekly declines in three weeks.

The US is also considering increasing its emergency oil reserves, with President Trump announcing that Venezuelan oil obtained under a recently reached deal would be used to replenish the Strategic Petroleum Reserve, which is near its lowest level in 44 years.