Oil Prices Surge After US-Iran Conflict Escalates

Oil prices surged more than 2% on Monday after the US attacked an Iranian island in the Strait of Hormuz, drawing retaliation from Tehran.

The Brent crude futures price rose to $90.31 a barrel, up 2.51%, while US West Texas Intermediate crude was at $85.23, up 2.19%. The attack on Iran's Larak island marked the first known American strikes on the Gulf nation since late July.

The conflict between the US and Iran has been ongoing for six months, with negotiations to end it stalled. Mediators are working to reopen the Strait of Hormuz, which accounts for a fifth of the world's oil supply.

Suvro Sarkar, head of energy research at DBS, said that there was more chance of contained confrontation rather than sustained escalation in the conflict. He added that oil prices would likely remain rangebound between $85 and $95 per barrel unless clarity emerges on the situation in the Strait of Hormuz.