Oil Market Surges as US-Iran Tensions Rekindle Supply Fears

The global oil market saw a significant surge of over 2% on Monday as tensions between the US and Iran reignited concerns about supply disruptions. Brent crude futures rose by $2.39 or 2.71% to $90.49 a barrel, while US West Texas Intermediate (WTI) crude futures grew by $2.36 or 2.83% to $85.76 per barrel.

This increase comes as President Trump issued a new threat to Iran, following the first exchange of fire in a month. The war between the two nations has entered its sixth month, and market analysts are worried that global oil supplies may be impacted. Shipping data shows tanker traffic in the Strait of Hormuz remains low, with just five commodity vessels traversing the waterway on Monday.

Mediators have been seeking a deal to reopen the Strait of Hormuz, through which about 20% of global oil supplies passed before the war began. However, progress has stalled due to recent strikes. The buffers that the global oil market has been relying on are becoming exhausted, with US inventories nearing minimum levels.