Iran-US Tensions Spark Oil Price Surge Amid Supply Concerns
Oil prices rose more than 2% on Monday as renewed tensions between the US and Iran fueled fresh supply concerns. The conflict, which has been ongoing for six months, continues to delay hopes of reopening the vital shipping route through the Strait of Hormuz.
The latest exchange saw US strikes on two missile launchers located on Iran's Larak Island in the Strait of Hormuz on Sunday. In response, Iran targeted two US air bases in Jordan, according to Iranian state media.
Analysts believe that the market is increasingly pricing in a longer wait for any agreement between Washington and Tehran. Suvro Sarkar, head of energy research at DBS, said that expectations that negotiations could resume before the end of the third quarter now appear less likely.
Brent crude futures gained $2.21, or 2.5%, to trade at $90.31 per barrel by 0436 GMT, while US West Texas Intermediate (WTI) crude advanced, rising $1.83, or 2.2%, to $85.23 per barrel.