US-Iran Conflict Escalates, Oil Prices Surge Amid Strait of Hormuz Uncertainty

Oil prices surged over 2% on Monday after the US attacked an Iranian island in the Strait of Hormuz, escalating tensions between the two nations. The attack on Larak Island was followed by a retaliation from Iran, which targeted two US air bases in Jordan.

US President Donald Trump claimed that Iran's energy hub of Kharg Island was being 'blown to smithereens', but there is no evidence to support this claim. Negotiations between the US and Iran have stalled, with mediamors working to reopen the Strait of Hormuz, through which a fifth of the world's oil flows.

Suvro Sarkar, head of energy research at DBS, said that the conflict is likely to remain contained, but the timelines for reopening the strait are uncertain. The number of vessels sailing through the strait has decreased, reflecting caution among companies wary of attacks on ships.