SINGAPORE: Global oil prices rose sharply on Monday after renewed military exchanges between the United States and Iran intensified concerns over the security of energy shipments through the Strait of Hormuz, one of the world’s most strategically important oil transit routes.
Brent crude futures gained 3.08%, rising by $2.34 to $78.35 per barrel, while US West Texas Intermediate (WTI) crude advanced 3.09%, climbing $2.21 to $73.62 per barrel during early Asian trading.
The gains followed a fresh escalation in regional tensions over the weekend. Iran expanded its military strikes to include targets in Qatar and the United Arab Emirates after the United States carried out additional strikes on Iranian positions, extending a cycle of retaliatory attacks that has raised fears of wider instability across the Gulf.
The renewed conflict has once again placed the Strait of Hormuz at the centre of global attention. The narrow waterway carries a significant share of the world’s seaborne oil exports, making any disruption a major concern for international energy markets.
US President Donald Trump stated on Sunday that commercial shipping remained free to pass through the Strait of Hormuz. However, Iranian authorities maintained that the waterway had been closed after a vessel allegedly entered the area using an unauthorised route and was subsequently struck.
According to ship-tracking data from Kpler, only six vessels passed through the strait on Sunday, marking the lowest daily traffic recorded in five weeks and highlighting growing caution among shipping operators.
The latest hostilities have also cast doubt on the future of a temporary agreement reached between Washington and Tehran last month. The understanding had been intended to reopen the Strait of Hormuz and create a 60-day window for negotiations aimed at ending the conflict.
Although the agreement helped increase global oil supply by 4.1 million barrels per day in June, production remained 9.4 million barrels per day below pre-war levels, according to the International Energy Agency’s latest monthly report.
Market analysts warned that the renewed violence has weakened expectations of a swift diplomatic resolution.
Analysts at ANZ said hopes for a quick settlement had diminished after tensions escalated again over the weekend, increasing uncertainty for energy markets.
Tony Sycamore, a market analyst at IG, noted that despite the rise in crude prices, the market’s reaction remained relatively restrained. He said investors appeared to believe that the latest military exchanges represented an escalation within an already fragile ceasefire rather than the complete breakdown of the truce.
He added that it remains uncertain whether that assessment will prove accurate as the situation continues to develop.
