SINGAPORE: Oil prices extended their gains on Monday as escalating tensions between the United States and Iran and attacks on vessels in and around the Strait of Hormuz raised fears of prolonged disruptions to Middle Eastern crude supplies.
Brent crude futures rose 52 cents, or 0.54%, to $96.80 per barrel, while US West Texas Intermediate (WTI) crude gained 66 cents, or 0.72%, to $92.14 per barrel by 2354 GMT. The gains followed a sharp rally last week, when Brent jumped 7.8% and WTI climbed nearly 10%.
The latest increase came after US forces struck three Iranian oil tankers on Saturday, including one near Kharg Island, a major Iranian oil export hub. Iran’s Islamic Revolutionary Guard Corps said it had also targeted three oil tankers using what it described as unauthorized routes through the Strait of Hormuz, along with three US vessels in other locations.
The attacks have intensified concerns about the safety of commercial shipping in the strategic waterway. The Strait of Hormuz is a crucial route for global energy supplies, and reduced tanker traffic through the strait has raised fears that the disruption could continue for an extended period.
Shipping activity has already declined sharply. According to shipping data cited by Reuters, an average of around 10 commodity vessels a day crossed the Strait of Hormuz during the past 10 days, the lowest level since May. The reduction in traffic is adding pressure to global oil markets as traders assess the possibility of a wider supply shock.
Iran has also indicated that it plans to establish a restricted zone near the Strait of Hormuz, adding another layer of uncertainty for international shipping and energy markets. Analysts expect oil supplies from the Middle East to remain constrained if the confrontation continues.
The latest developments are keeping investors focused on geopolitical risks. Any further disruption to tanker movements could push crude prices higher and increase transportation, fuel and production costs worldwide.
