By COMFORT OGBONNA
Oil prices rose nearly 2% on Monday after U.S. forces struck an Iranian island in the Strait of Hormuz and Tehran retaliated, renewing concerns about potential disruptions to one of the world’s most important oil shipping routes.
Brent crude futures gained $1.77, or 2%, to $89.87 a barrel by 0733 GMT, while U.S. West Texas Intermediate crude rose $1.45, or 1.74%, to $84.85 a barrel.
The latest price increase came after U.S. forces struck two Iranian launchers on Larak Island in the Strait of Hormuz on Sunday. The strikes were the first known U.S. attacks on Iran since late July and marked another escalation in a conflict that has now extended into its sixth month.
Iran responded by attacking two U.S. air bases in Jordan, according to Iranian state media citing the country’s Revolutionary Guards.
The developments have renewed concerns about the security of the Strait of Hormuz, a critical waterway through which roughly one-fifth of global oil supplies flowed before the conflict began.
Any prolonged disruption to shipping through the strait could have significant consequences for global energy markets, potentially reducing available supplies and pushing crude prices substantially higher.
U.S. President Donald Trump said in a social media post Sunday that Iran’s Kharg Island, a major energy hub and oil export center, was being heavily attacked. However, there was no independent evidence that the island had come under attack at the time, and Iran denied that a strike had taken place there, saying oil operations were continuing.
The conflicting claims added to uncertainty in energy markets as traders assessed whether the latest military escalation would remain limited or develop into a broader confrontation capable of threatening oil production and transportation infrastructure.
Negotiations aimed at ending the conflict remain stalled, while international mediators continue efforts to secure the reopening of the Strait of Hormuz.
Energy analysts said the latest flare-up could delay diplomatic efforts and prolong uncertainty over when normal shipping activity through the waterway can resume.
The conflict has already altered shipping patterns in the region. The number of visible commercial vessels passing through the Strait of Hormuz over the weekend fell to about five per day, according to shipping data, as companies remained cautious about sending vessels through an area where attacks on commercial shipping have become a growing concern.
A maritime security report said a tanker was struck by a projectile while traveling inbound through the strait on Saturday, further highlighting the risks facing shipping companies operating in the area.
The reduction in vessel traffic has raised concerns that disruptions could persist even if there is no major damage to oil production facilities. Shipping companies may continue to avoid the route because of the risk to vessels and crews, potentially restricting the movement of crude and refined petroleum products.
Analysts said the most likely scenario remained a contained confrontation rather than a prolonged escalation, but warned that each new military incident could push back expectations for a reopening of the strait.
Oil prices could therefore remain volatile as traders respond to developments on the ground and attempts to restart diplomatic negotiations.
Some market analysts expect Brent crude to remain within a range of roughly $85 to $95 a barrel in the near term if the conflict does not escalate significantly. A broader disruption to shipping or production could push prices above that range.
The United States is also expected to increase economic pressure on Iran. Treasury Secretary Scott Bessent said Washington could impose new secondary sanctions on Iran on a regular basis, potentially increasing pressure on countries and companies that continue doing business with the country.
Such measures could further affect Iran’s ability to sell oil internationally, although the ultimate impact would depend on enforcement and the willingness of other countries to continue purchasing Iranian crude.
Despite Monday’s increase, Brent and WTI remain on track for modest monthly declines in August after both benchmarks fell more than 4% last week. The decline marked their first weekly loss in three weeks.
The recent weakness in oil prices has reflected expectations that global supplies could remain adequate despite geopolitical risks, although the situation around the Strait of Hormuz has added a new source of uncertainty.
The United States is also taking steps to strengthen its own emergency energy supplies. Trump said Sunday that oil secured through a recently announced agreement with Venezuela would be used to replenish the U.S. Strategic Petroleum Reserve.
The reserve has fallen close to its lowest level in more than four decades after large drawdowns in response to previous global supply disruptions and periods of elevated fuel prices.
The plan to use Venezuelan oil to rebuild the reserve could provide additional flexibility for the United States in responding to future supply shocks, although increasing Venezuelan production would require significant investment and infrastructure work.
For global energy markets, the immediate focus remains on the Strait of Hormuz and whether military tensions prevent commercial shipping from returning to normal.
With negotiations stalled and vessels already reducing their passage through the waterway, traders are likely to remain highly sensitive to any further attacks, diplomatic developments or signs that oil exports are being disrupted.
The latest rise in crude prices underscores how quickly geopolitical developments can affect energy markets, particularly when they involve a major shipping route that carries a significant share of the world’s oil supply.
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