Oil prices jumped over 3% on Monday due to renewed military tensions between the U.S. and Iran, raising concerns about energy shipments through the Strait of Hormuz. Brent crude futures rose by $2.67 to $78.68, while U.S. West Texas Intermediate crude increased by $2.48 to $73.89 a barrel. Analysts noted that shipping operators are becoming more cautious, leading to a slowdown in inbound movements amid escalating security threats.
Recent strikes by both the U.S. and Iran have intensified fears of further conflict. Iran claimed to have targeted U.S. facilities in the Gulf and announced the closure of the Strait of Hormuz. Vessel traffic through the strait hit a five-week low, with only six vessels transiting on Sunday, according to ship-tracking data.
The ongoing attacks jeopardize a recent U.S.-Iran agreement aimed at reopening the strait and ending hostilities after 60 days of negotiations. While global oil supply increased by 4.1 million barrels per day in June, it remains significantly below pre-war levels. Additionally, Goldman Sachs projects that expanding pipeline capacity could protect over 60% of Gulf oil exports from future disruptions by the end of 2028.
