As US and Iran exchanged fresh military strikes and both sides issued conflicting claims over the status of the Strait of Hormuz, global crude oil prices surged over 4 per cent on Monday, trading close to the $80-per-barrel mark. There are heightened concerns over possible disruptions to oil supplies from the Middle East through Strait of Hormuz, a key global energy shipping route.
Iran claimed the Strait of Hormuz had been closed "until further notice," a statement rejected by the US Central Command (Centcom), which said it had launched further attacks to safeguard freedom of navigation through the strategic waterway.International benchmark Brent crude gained more than 4 per cent, rising $3.28 to nearly $80 per barrel. US benchmark West Texas Intermediate (WTI) also climbed 4.55 per cent, or $3.25, to $74.66 per barrel.
The sharp rise in prices followed reports that Iran had announced the closure of the Strait of Hormuz “until further notice”, a claim rejected by the US Central Command (Centcom), which said it had conducted additional strikes to safeguard freedom of navigation through the strategic waterway.
Market sentiment weakened further after US President Donald Trump indicated that the interim ceasefire agreement and Memorandum of Understanding with Iran were effectively no longer in force, even as diplomatic efforts between the two countries continued.On Sunday, US forces carried out precision strikes on dozens of targets at multiple locations in Iran, according to Centcom. The operation marked the fourth round of US military action against Iran within a week.
Sunday's strikes marked the fourth round of US military action in a week. Centcom was quoted as saying that the operation was carried out in response to Iranian attacks on a Cyprus-flagged container vessel.Centcom said the strikes were launched in response to Iranian attacks on a Cyprus-flagged container vessel. Reports also indicated that Iran’s Islamic Revolutionary Guard Corps targeted commercial ships again, following which US forces intercepted an Iranian cruise missile and an attack drone.
The renewed conflict has restored a geopolitical risk premium to crude oil prices, reversing earlier declines that followed a temporary peace agreement, which had raised hopes of increased oil supplies from the Persian Gulf.The escalation has raised concerns over a prolonged conflict that could disrupt energy supplies from the Middle East, one of the world’s most important oil-producing regions.
The International Energy Agency (IEA) warned on Friday that the latest escalation could disrupt efforts to rebuild global oil inventories later this year, highlighting the potential economic consequences of a prolonged conflict.
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