US-Iran Tensions Spark Oil Price Spike to Above $90
Oil prices surged on Monday morning after the US and Iran exchanged strikes for the first time in a month. Brent, the benchmark for two-thirds of the world's oil, rose 3.34% to $91.04 per barrel at 12:52 pm UAE time. West Texas Intermediate, the gauge that tracks US crude, was trading 3.27% higher at $86.13 per barrel.
The uptick in prices came after the US struck Iranian targets linked to potential mining activity near the Strait of Hormuz. The US military action marked the first American military action against Iran in a month. According to a US official, Iran's Islamic Revolutionary Guard Corps was preparing to launch rockets carrying sea mines into the strait when US forces struck.
Iran responded with strikes on two US bases in Jordan, with eight missiles intercepted by the kingdom's military. US President Donald Trump also shared a one-line post on Truth Social threatening 'Kharg Island being blown to smithereens.'
Kharg Island handles about 90% of Iran's oil exports, with estimates pegging its loading capacity at seven million barrels per day and storage capacity at 30 million barrels. US Treasury Secretary Scott Bessent told Reuters that new secondary sanctions on Iran's trading partners are expected to be unveiled on a weekly basis.
Crude oil prices have swung sharply throughout the six months of war, with Brent hitting an intraday high of about $126 per barrel in April before falling back as diplomatic efforts eased fears of a prolonged disruption to global supplies. The immediate bullish force is supply-security uncertainty, said Naeem Aslam, chief investment officer at Zaye Capital Markets.