US Strikes on Iran Send Oil Prices Soaring

Oil prices surged in Asian trade on Monday following a US military operation against Iranian launchers on Larak Island, which has reignited concerns about energy flows through the Strait of Hormuz.

According to Investing.com, as of 00:53 ET (04:53 GMT), expiring November crude futures rose by 2.5% to $90.28 per barrel, while West Texas Intermediate crude futures advanced 2.2% to $85.24 per barrel.

The US military operation on Sunday targeted two Iranian launchers on Larak Island, which is located near the strategic waterway. A US official reported that Islamic Revolutionary Guard Corps forces were observed preparing to launch rockets carrying sea mines into the Strait of Hormuz.

Iran retaliated with a missile strike against US forces stationed in Jordan, but nearly all incoming missiles were intercepted, and there was no significant impact according to a Fox News report citing a US source.

Analysts at ING warned that oil producers may face renewed pressure if further escalation occurs. Oil markets have remained sensitive to Middle East conflict developments this year, with Brent repeatedly swinging on shifting expectations for military escalation and ceasefire negotiations.

The Strait of Hormuz is a critical chokepoint for global energy supplies, with an average of 5 million barrels per day (b/d) transiting the strait. The US has been seeking to reassure international shipping that it will maintain freedom of navigation through the waterway.