Oil Prices Soar as US-Iran Tensions Escalate

Oil prices surged on Monday after Iran and the US traded demands for compensation, dimming prospects for a deal to reopen the Strait of Hormuz. The tensions between the two nations led to a 5 percent increase in oil prices, with Brent crude futures settling up $4.17 or 4.99 percent at $87.72 a barrel.

The US President Donald Trump said Iran must pay compensation for 'all of the people that they have killed and gravely wounded.' In response, Iran's Foreign Minister Abbas Araqchi stated that the US must meet other conditions before the waterway is reopened, including an end to sanctions and military threats.

Traders believe that tighter supplies are more probable in the near term due to the added demands from Iran. The Iran-aligned Houthis also attacked Saudi Aramco's Jazan refinery on Sunday, further threatening supply.