Oil Prices Soar on Geopolitical Tensions Over Iran and Strait of Hormuz

Oil prices surged at the start of the week due to heightened geopolitical tensions surrounding Iran and the Strait of Hormuz. Unconfirmed reports indicate that an Iranian missile attack struck a tanker in the area, setting it on fire.

The move follows renewed uncertainty around Iran's activities, which has revived the geopolitical risk premium embedded in crude prices. WTI crude rose 2% towards $80 a barrel and Brent crude approached $85 as traders priced in a potential supply disruption.

Global supply conditions have been improving, but uncertainty surrounding the future security and governance of the Strait of Hormuz remains a major concern for the oil market. President Trump has indicated that he is relying on economic pressure against Iran rather than immediately returning to military action.