Oil extends gains as supply fears deepen

Oil prices surged on Monday, surpassing the US$107 per barrel mark as tensions in the Middle East intensified and heightened concerns about potential disruptions to global energy supplies. Brent crude for November delivery surged 2.8 percent to US$107.54 per barrel, while the US benchmark West Texas Intermediate for October climbed 2.3 percent to US$102.34.

Both contracts had extended their gains from last week after climbing back above the US$100 threshold. The market's primary focus remained on the Middle East, where fresh security worries threatened crucial export routes. This came after Saudi Arabia temporarily halted its East-West pipeline following drone attacks, and a merchant vessel was attacked in the Strait of Hormuz, resulting in one death and three injuries, according to Iranian authorities.

The strait, which was previously open, now requires vessels to seek permission and is being evaluated for potential fee imposition by Iran. Ships that do not comply are frequently targeted by Iranian strikes, while the United States periodically bombards the Iranian coastline to challenge Iran's control over the strait. Additionally, Oman has delayed discussions between Iran and Gulf states regarding the future of the strategic waterway, a critical route for a significant portion of the world's seaborne oil trade.