Oil Futures Skyrocket on US-Iran Conflict and Strait of Hormuz Threat
Oil futures surged by nearly 4% on Monday as the conflict between the US and Iran heightened concerns over the safety of Gulf shipping routes. The front-month West Texas Intermediate (WTI) contract rose 3.79% to $86.56 per barrel, while Brent crude increased 3.69% to $91.35.
The key indicator of tanker movement suggests that uninterrupted shipping could swiftly eliminate the geopolitical premium. A lasting tanker blockage or damaged loading terminal would constrain immediate supply and widen backwardation.
The U.S. Energy Information Administration (EIA) forecasts Brent crude will average $78 in the fourth quarter, provided disrupted supplies are restored. However, upside potential is capped by demand, with a Reuters survey of 31 analysts projecting Brent to reach $85.08 in 2026.