Oil Prices Soar as US-Iran Tensions Escalate in Middle East
Oil prices surged more than 2% on Monday after the US attacked an Iranian island in the Strait of Hormuz, prompting retaliation from Tehran. The conflict in the Middle East has now extended into its sixth month.
The US strike targeted two launchers on Iran's Larak island, with Brent crude futures climbing $2.51 to $90.61 a barrel and U.S. West Texas Intermediate crude rising by $2.13 to $85.53.
According to IG market analyst Tony Sycamore, 'Looks like we are in another escalation phase. How long that lasts is impossible to determine.' Technical charts suggest that if the conflict escalates and pushes WTI above resistance at $85.80 to $85.90 a barrel, it could lead to further gains.
The Strait of Hormuz, through which a fifth of the world's oil flows, has been a point of contention since the conflict began in February. US Treasury Secretary Scott Bessent stated that the US is likely to issue new secondary sanctions weekly on Iran, with the aim of cutting it off entirely from the dollar-based financial system.