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Oil surges above $90 as US-Iran conflict threatens supplies through Strait of Hormuz

By The South Asia Times

LONDON - Global oil prices climbed sharply on Monday, with Brent crude rising above $90 a barrel for the first time in more than a month, as escalating military hostilities between the United States and Iran heightened concerns over disruptions to energy supplies through the Strait of Hormuz, Reuters reported.

Brent crude futures rose 2.37% to $90.19 per barrel in early trading, reaching their highest level since June 11. The international benchmark had already surged nearly 16% last week, marking its strongest weekly gain since April.

US benchmark West Texas Intermediate (WTI) crude also advanced, climbing 2.07% to $84.20 per barrel, its highest level since June 12 after posting a weekly gain of more than 15%, the biggest increase since early March.

The latest rally followed another weekend of military escalation in the Middle East, with the United States carrying out a ninth consecutive night of strikes on targets inside Iran while regional tensions spread across the Gulf. Reuters reported that Kuwait and Bahrain, both key US allies, also reported new Iranian attacks.

Markets have become increasingly focused on the security of the Strait of Hormuz, the narrow waterway between Iran and Oman through which roughly 20% of the world's seaborne oil trade passes. Any disruption to shipping through the strait is widely viewed as a major threat to global energy supplies and fuel prices.

The latest surge in oil prices comes as Washington and Tehran continue exchanging military strikes despite indirect diplomatic contacts through regional mediators. The conflict intensified after renewed U.S. operations earlier this month and subsequent Iranian retaliatory attacks against American military assets in the Gulf.

Energy analysts say traders are pricing in a higher geopolitical risk premium as insurers, shipping companies and commodity markets closely monitor developments around the Strait of Hormuz. While oil exports have not been completely halted, continued military activity in and around the strategic waterway has raised concerns about possible supply interruptions if the conflict expands further.