US-Iran Tensions Spark Oil Price Surge

Oil prices extended their gains on Monday as tensions between the US and Iran escalated in the Strait of Hormuz. The Brent crude futures price climbed 52 cents, or 0.54%, to $96.80 a barrel by 2354 GMT, while US West Texas Intermediate crude was at $92.14 a barrel, up 66 cents, or 0.72%. This comes after the US forces struck three Iranian oil tankers on Saturday, including one off the coast of Kharg Island, near Iran's key oil export hub.

The attacks have heightened concerns of a prolonged supply disruption from West Asia. The average number of commodity ships transiting the Strait of Hormuz per day over the past 10 days has been 10, the lowest since May, according to data from analytics firm Kpler. OPEC+ kept its oil output policy unchanged for October at a meeting on Sunday.

ANZ analysts predict that a prolonged standoff between the US and Iran will delay the path to full recovery of West Asia supply. They expect exports to remain constrained through the rest of 2026, before a gradual reopening late in Q4 2026. A return to pre-war throughput is not expected until late first quarter or early second quarter of 2027.