Oil Prices Rise as US and Iran Resume Military Attacks

Oil prices climbed nearly 2% on Monday after the United States attacked two launchers on Iran’s Larak Island in the Strait of Hormuz, prompting a reported Iranian response against two U.S. air bases in Jordan. The conflict has now entered its sixth month.

Brent crude futures rose $1.77, or 2%, to $89.87 a barrel by 0733 GMT. U.S. West Texas Intermediate gained $1.45, or 1.74%, to $84.85. The U.S. strikes marked the first known American attacks on Iran since late July.

U.S. President Donald Trump said on social media that Iran’s energy hub on Kharg Island was being "blown to smithereens." No evidence showed that the island had come under attack, and Iran denied the claim, saying oil operations continued. Iranian media, citing the Revolutionary Guards, reported the attacks on the U.S. bases.

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We see more chances of contained confrontation rather than any sustained escalation in the conflict.

Talks aimed at ending the conflict remain at an impasse. Mediators are trying to reopen the Strait of Hormuz, a major oil route that carried one-fifth of global oil before the war began in late February. Suvro Sarkar, head of energy research at DBS, said the latest flare-ups were more likely to produce a contained confrontation than sustained escalation. He said oil could remain in an $85-$95 range unless the situation in the strait became clearer.

Shipping data showed only five visible commodity vessels a day passed through the strait over the weekend, reflecting caution among companies concerned about attacks. The United Kingdom Maritime Trade Operations said a tanker was hit by a projectile while entering the strait on Saturday. U.S. Treasury Secretary Scott Bessent said Washington would probably impose new secondary sanctions on Iran weekly. Trump also said oil from a recently reached deal with Venezuela would replenish the U.S. Strategic Petroleum Reserve, which has fallen near a 44-year low.

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blown to smithereens