Oil jumps 3% after US, Iran escalate strikes in Mideast

SINGAPORE: Oil prices jumped on Monday as Iran expanded strikes on Gulf states following attacks by the United States, threatening energy shipments via the Strait of Hormuz.

Brent crude futures climbed $2.34, or 3.08%, to $78.35 by 2311 GMT, while U.S. West Texas Intermediate crude rose $2.21, or ‌3.09%, to $73.62 ⁠a barrel.

Over ⁠the weekend, Tehran extended strikes on Qatar and the United Arab Emirates while the U.S. launched further strikes on Iran, the latest in a cycle of attacks and counter-attacks over shipping through the strait.


U.S. President Donald Trump said on Sunday that the Strait of Hormuz is open to commercial traffic, although Iran declared earlier that it closed ⁠the strait ‌after a vessel traveled on an unapproved route and was struck.

Six vessels transited the strait on Sunday, shiptracking data from ⁠Kpler showed, the lowest number in five weeks.

The escalating attacks cast further doubt on the future of an interim U.S.-Iranian agreement signed last month that aimed to reopen the strait and end the war after a further 60 days of negotiations.

Following the agreement, global oil supply rose by 4.1 million barrels per day in June, but remained 9.4 million bpd below pre-war ‌levels, the International Energy Agency said in its monthly report on Friday.

"Hopes of a relatively quick resolution to the recent skirmishes may be in ⁠doubt after tension escalated over the weekend," ANZ analysts said in a note.

IG market analyst Tony Sycamore said the relatively tame rise in oil prices suggested the market was taking the view that the current flare up represented an escalation within a fragile truce and fell well short of a complete collapse of the ceasefire.

"How accurate that view is remains to be seen," he said in a note.