Iran Ends Ceasefire with Surprise Missile Strikes

For thirty-one days, the oil market had priced in a ceasefire that nobody had formally declared. Brent crude drifted sideways, trading desks thinned out for the end-of-summer lull, and analysts described the Strait of Hormuz as relatively stable in their morning notes.

But on Monday morning, that stability cost about $2.20 a barrel to unwind. Iran's Islamic Revolutionary Guard Corps launched a salvo of ballistic missiles at two US military installations in Jordan before dawn, then sent an armed drone toward Al Minhad Air Base in the United Arab Emirates hours later.

The strikes came within forty-eight hours of a US Navy airstrike on Iran's Larak Island, a fueling hub for the IRGC's fleet of fast boats that have harassed tanker traffic in the Gulf since the conflict widened last spring. Brent crude settled at $91.14 on Monday, up 2.5 percent.

Energy analyst Saul Kavonic noted that the market has been pricing in a 'no war, no peace' situation with only partial volumes flowing through the Strait of Hormuz, which could last well into 2027.