Oil Prices Rise as Strait of Hormuz Tensions Escalate
Oil prices continued their upward trend on Monday as tensions between the US and Iran escalated. The Strait of Hormuz, through which a fifth of the world's oil supply passes, has seen increased military action in recent days.
The US and Iran have been engaging in tit-for-tat strikes on vessels sailing in the strait, with the US striking three Iranian oil tankers on Saturday and Iran targeting three additional US vessels. This has caused a reduction in oil flows through the strait.
Brent crude futures rose 79 cents to $97.07 a barrel, while WTI crude was at $92.28 a barrel, up 80 cents from the previous day. Brent had risen 7.8 percent last week, while WTI gained nearly 10 percent.
Priyanka Sachdeva, head of market insights at Phillip Nova, warned that if tanker traffic slows down materially, the market could price in a larger supply shock.