Oil Prices Surge as US-Iran Conflict Escalates
Oil prices surged more than 2% on Monday following a US attack on Iran's Larak island in the Strait of Hormuz. The assault drew retaliation from Tehran, further escalating tensions in the Middle East.
The US forces struck two launchers on Iran's Larak island on Sunday, marking the first known American strikes on the Gulf nation since late July. In response, Iran attacked two US air bases in Jordan, according to Iranian media citing Iran's Revolutionary Guards.
Negotiations to end the conflict are at an impasse, while mediators work to reopen the Strait of Hormuz, through which a fifth of the world's oil flows. The US Treasury Secretary Scott Bessent told Reuters on Sunday that the US is likely to issue new secondary sanctions weekly on Iran to cut it off entirely from the dollar-based financial system.
Brent crude futures climbed $2.51 or 2.85% to $90.61 a barrel, while US West Texas Intermediate crude was at $85.53 up $2.13 or 2.55%. Market analyst Tony Sycamore said 'Looks like we are in another escalation phase. How long that lasts is impossible to determine.'
The number of visible commodity vessels sailing through the Strait of Hormuz over the weekend dropped to five a day, shipping data showed on Monday, reflecting caution among companies wary of attacks on ships.