Oil prices rose more than 2% Monday after the United States attacked an Iranian island in the Strait of Hormuz and drew retaliation from Tehran, as the six-month-old conflict between the two countries showed no signs of easing.
Brent crude futures climbed $2.21, or 2.51%, to $90.31 a barrel as of 0436 GMT. U.S. West Texas Intermediate crude rose $1.83, or 2.19%, to $85.23 a barrel.
U.S. forces struck two launchers on Iran’s Larak Island in the Strait of Hormuz on Sunday, marking the first known American strikes on the country since late July.
In response, Iran attacked two U.S. air bases in Jordan, Iranian state media reported Monday, citing the country’s Revolutionary Guards.
President Donald Trump said in a brief social media post Sunday that Iran’s energy hub of Kharg Island was being “blown to smithereens.” The post was accompanied by an AI-generated video clip but included no further details, and there was no evidence the island was actually under attack.
Negotiations to end the conflict remain at an impasse as mediators work to reopen the Strait of Hormuz, through which a fifth of the world’s oil flowed before the war began at the end of February.
“We see more chances of contained confrontation rather than any sustained escalation in the conflict. What continues to be impacted with every flare up are the timelines for Hormuz ‘reopening,’” said Suvro Sarkar, head of energy research at DBS.
“We were earlier hoping that we could be back to deal negotiations for U.S.-Iran by the end of 3Q, but that is looking more unlikely now,” Sarkar said. “Thus, expect oil prices to remain rangebound in the $85-95 per barrel range unless more clarity emerges on the situation in the Strait of Hormuz.”
The number of visible commodity vessels that sailed through the strait over the weekend dropped to five a day, shipping data showed Monday, reflecting caution among companies wary of attacks on ships.
The United Kingdom Maritime Trade Operations reported Sunday that a tanker was struck by a projectile while sailing inbound through the strait Saturday.
U.S. Treasury Secretary Scott Bessent told Reuters on Sunday that the U.S. is likely to issue new secondary sanctions on Iran weekly.
Brent and WTI are set to post small declines for August after falling more than 4% last week in their first weekly decline in three weeks.
Trump said Sunday that oil from a recently struck deal with Venezuela will be used to replenish the U.S. Strategic Petroleum Reserve, which has dropped to near its lowest level in 44 years.
