Oil prices jumped on Monday
as Iran expanded strikes on Gulf states following attacks by the
United States, threatening energy shipments via the Strait of
Hormuz.
Brent crude futures climbed $2.34, or 3.08%, to
$78.35 by 2311 GMT, while U.S. West Texas Intermediate crude
rose $2.21, or 3.09%, to $73.62 a barrel.
Over the weekend, Tehran extended strikes on Qatar and the
United Arab Emirates while the U.S. launched further strikes on
Iran, the latest in a cycle of attacks and counter-attacks over
shipping through the strait.
U.S. President Donald Trump said on Sunday that the Strait
of Hormuz is open to commercial traffic, although Iran declared
earlier that it closed the strait after a vessel traveled on an
unapproved route and was struck.
Six vessels transited the strait on Sunday, shiptracking
data from Kpler showed, the lowest number in five weeks.
The escalating attacks cast further doubt on the future of
an interim U.S.-Iranian agreement signed last month that aimed
to reopen the strait and end the war after a further 60 days of
negotiations.
Following the agreement, global oil supply rose by 4.1
million barrels per day in June, but remained 9.4 million bpd
below pre-war levels, the International Energy Agency said in
its monthly report on Friday.
“Hopes of a relatively quick resolution to the recent
skirmishes may be in doubt after tension escalated over the
weekend,” ANZ analysts said in a note.
IG market analyst Tony Sycamore said the relatively tame
rise in oil prices suggested the market was taking the view that
the current flare up represented an escalation within a fragile
truce and fell well short of a complete collapse of the
ceasefire.
“How accurate that view is remains to be seen,” he said in a
note.