Hormuz Tensions Send Oil Prices Soaring

Oil prices surged more than 2% on Monday after the US attacked an Iranian island in the Strait of Hormuz, escalating tensions between the two countries. The attack, which was the first known American strikes on Iran since late July, pushed Brent crude futures up $2.21 to $90.31 a barrel and West Texas Intermediate crude rose by $1.83 to $85.23.

The US struck two launchers on Larak Island in response to Iranian attacks on the Strait of Hormuz, which has been at the center of the conflict between the two nations since February. The Strait is a critical waterway for global oil trade, accounting for nearly 20% of the world's oil supply.

Negotiations to end the conflict are stalled, and mediators are working to reopen the strait. Suvro Sarkar, head of energy research at DBS, warned that oil prices could remain rangebound in the $85-95 per barrel range unless more clarity emerges on the situation.