US-Iran Tensions Spark Oil Price Surge Amid Strait of Hormuz Concerns

Oil prices have surged at the start of the new week as tensions between the US and Iran escalate, raising concerns about shipping through the Strait of Hormuz.

Brent crude oil has broken above $90, while WTI crude is testing key technical resistance near $86. The 100-day SMA on both indices has acted as a significant barrier to upside momentum in recent weeks.

The renewed tensions have revived concerns about the impact of disruptions to the Strait of Hormuz on global energy supplies. The waterway is one of the world's most important oil transportation routes, and any disruption could lead to a substantial increase in geopolitical risk premium in oil prices.

A stronger US dollar, fueled by Federal Reserve Chair Kevin Warsh's hawkish comments at Jackson Hole, is also weighing on oil markets. Markets have increased the probability of a September rate hike to around 57%, which could limit gains in dollar-denominated commodities such as crude oil.