LONDON: Crude oil prices rose by more than $1 in early Asian trading on Monday as escalating tensions between the United States and Iran in the Strait of Hormuz raised concerns about disruptions to global oil supplies.
The latest escalation followed a US strike on Iran’s Larak Island in the Strait of Hormuz and Iran’s subsequent targeting of US military bases in the region.
By 0040 GMT, Brent crude futures had gained $1.08, or 1.23%, to $89.18 a barrel. Meanwhile, US West Texas Intermediate (WTI) crude rose 92 cents, or 1.10%, to $84.32 a barrel.
US forces struck two missile launchers on Iran’s Larak Island in the Strait of Hormuz on Sunday.
The action marked the first known US military operation against Iran in the Gulf region since late July.
Meanwhile, Iranian media, citing the Islamic Revolutionary Guard Corps, reported on Monday that Iran had targeted two US military bases in Jordan in retaliation for the American strikes.
Analysts said oil prices could rise further if the conflict intensifies and WTI breaks above the $85.80-$85.90 resistance range.
Prices could initially retest last week’s high of $87.69 a barrel and could subsequently move toward July’s peak of $93.50, they said.
At the same time, negotiations aimed at ending the conflict remain stalled, while mediators continue efforts to reopen the Strait of Hormuz.
Before the conflict began, the strategically important waterway carried nearly one-fifth of the world’s oil supplies.
Although no clear agreement has yet emerged to reopen the strait, analysts said increased oil flows through the waterway have eased some concerns about a major disruption to global supplies.
However, shipping data showed that only five prominent commercial vessels crossed the Strait of Hormuz each day over the weekend. The decline reflected shipping companies’ cautious approach amid fears of further attacks.
The United Kingdom Maritime Trade Operations (UKMTO) also reported on Sunday that an unidentified projectile struck a tanker while it was transiting the Strait of Hormuz on Saturday.
Separately, US President Donald Trump said on Sunday that the United States would use oil secured under a recent agreement with Venezuela to replenish its Strategic Petroleum Reserve.
The reserve has fallen close to a nearly 44-year low, adding further significance to efforts to secure alternative oil supplies amid rising tensions in the Gulf.
