Oil Prices Soar as US-Iran Conflict Intensifies

The latest US-Iran conflict has caused oil prices to spike over $1 a barrel as tensions in the Middle East escalate. The Strait of Hormuz, one of the world's most important energy chokepoints, remains a key point of contention.

On Sunday, US forces struck two Iranian launchers on Larak Island in the Strait of Hormuz, which led to Iran retaliating by attacking two US air bases in Jordan. This marks the sixth month of conflict between the two nations and has raised concerns about crude supplies and shipping through the strategic waterway.

According to Reuters, the number of visible commodity vessels crossing the strait fell to about five a day over the weekend due to caution amid attacks on commercial vessels. The actual number could be higher as some ships have switched off their automatic identification systems to avoid detection.

Analysts at ANZ say that while oil flows through the Hormuz Strait remain intact, further disruptions could impact supply concerns. US President Donald Trump announced that oil from a recently struck deal with Venezuela would be used to replenish the US Strategic Petroleum Reserve, which has fallen close to its lowest level in 44 years.

Market analyst Tony Sycamore warns that the latest escalation phase could last for days or weeks and has highlighted the sensitivity of the oil market to developments around Hormuz. He predicts that if WTI crude pushes above resistance at $85.80-$85.90 a barrel, it would open the way for further gains.