Oil Prices Rise 2.5% As US-Iran Escalation Raises Fresh Strait Of Hormuz Supply Fears
Oil prices climbed in early Asian trading on Monday after fresh military exchanges between the US and Iran heightened concerns about crude supplies through the Strait of Hormuz. WTI front-month futures rose 2.47% to $85.46 a barrel, while Brent gained 2.71% to $90.49. The increase followed a US strike on two Iranian rocket launchers on Larak Island, located within the strategically important…
Oil prices saw a 2.5% increase on Monday following heightened military exchanges between the US and Iran, raising concerns about potential supply disruptions through the Strait of Hormuz. The WTI futures rose to $85.46 a barrel, while Brent gained 2.71% to $90.49. This price surge was triggered by a US airstrike on Iranian rocket launchers on Larak Island, located within the strategically vital Strait of Hormuz.
US Central Command reported that the strike was aimed at Iranian Revolutionary Guard forces preparing to launch rockets and deploy sea mines in the waterway.
The escalating tensions between the US and Iran, coupled with rising crude oil prices, weighed on market sentiment. Earlier, US President Donald Trump announced that Washington had completed mine-clearing operations in the Strait and cautioned against further attempts to impede shipping. In response, Iran launched ballistic missiles and drones towards US military facilities in Jordan, though Jordanian authorities intercepted eight missiles entering their airspace.
Iran's Revolutionary Guard also claimed to have targeted infrastructure and aircraft positions at two US bases in Jordan.
These developments have reignited worries about whether the current confrontation will remain contained or escalate into a broader disruption to Gulf energy exports. Shipping disruptions have kept the oil market on edge, as the Strait of Hormuz remains significantly below pre-war levels in terms of commercial shipping. On the weekend, vessel traffic reportedly decreased to around five ships per day, with another tanker reportedly hit by an unidentified projectile.
The US has maintained its blockade of Iranian ports, redirecting 83 commercial vessels and disabling or boarding several others by August 30.
With ongoing shipping disruptions, attacks on vessels, the blockade, and renewed concerns over mine deployment, traders are expected to closely monitor crude flows through the Strait of Hormuz for indications of a potential wider supply shock.
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