US Attack on Iranian Island Sends Oil Prices Soaring

Oil prices surged more than $1 per barrel on Monday following a US attack on Iran's Larak island in the Strait of Hormuz. The conflict, now in its sixth month, has pushed oil prices upward.

The US struck two launchers on the island, prompting Iranian retaliation against two US air bases in Jordan, according to reports from Tehran's Revolutionary Guards. Market analyst Tony Sycamore warned that 'we are in another escalation phase,' and it is unclear how long this will last.

Technical charts suggest that if WTI crude rises above $85.80 to $85.90 per barrel, it could lead to further gains. However, negotiations to end the conflict remain at an impasse, while mediators work to reopen the Strait of Hormuz, which accounts for a fifth of global oil flows.

Despite concerns over supply disruption, increased oil flows through the strait have kept anxiety in check, according to ANZ analysts. The number of visible commodity vessels passing through the strait dropped to five per day over the weekend, reflecting caution among companies wary of attacks on ships.