Oil Prices Surge Amid US-Iran Tensions and Reduced Strait Traffic

Oil prices have remained near six-week highs due to ongoing tensions between the US and Iran. This week, both sides have launched strikes on vessels sailing in the Strait of Hormuz, a major chokepoint for global oil supplies.

According to data from analytics firm Kpler, an average of 10 commodity ships transited the Strait of Hormuz per day over the past 10 days, which is the lowest since May. This reduced traffic has contributed to lower crude oil flows in the Middle East.

Brent crude futures were trading at $96.19 a barrel on Monday, having earlier hit their highest point since July 24 at $97.93. US West Texas Intermediate crude also hovered near a recent six-week high at $91.03 a barrel.

Goldman Sachs has predicted that oil prices may rally to as much as $120 a barrel if attacks on shipping rise. Mohsen Rezaei, the secretary of Iran's Supreme National Security Council, announced that a restricted zone will be declared outside the Strait of Hormuz in the coming days.