Oil Prices Surge Above $90 as US-Iran Tensions Escalate

Global oil prices surged sharply on Monday, with Brent crude rising above $90 per barrel for the first time in weeks, as escalating military tensions between the United States and Iran heightened concerns over potential disruptions to oil supplies passing through the Strait of Hormuz.

Brent crude futures climbed $2.77, or 3.14%, to $90.87 per barrel by 0612 GMT, reaching their highest level since June 11. The benchmark extended last week's rally after posting a 15.9% weekly gain, marking its strongest weekly performance since April.

Meanwhile, U.S. West Texas Intermediate (WTI) crude increased $2.35, or 2.85%, to $84.84 per barrel, its highest level since June 12. WTI also recorded a 15.5% rise last week, the largest weekly gain since early March.

Middle East Conflict Intensifies

The latest jump in oil prices comes as the conflict between the United States and Iran continues to escalate. Over the weekend, the U.S. carried out its ninth consecutive night of military strikes against Iran, while American allies Kuwait and Bahrain also reported fresh Iranian attacks.

Growing fears that the conflict could spread further across the Gulf region have significantly increased concerns over the security of global energy supplies.

Strait of Hormuz Under Pressure

The Strait of Hormuz, one of the world's most important oil shipping routes, remains at the center of the crisis. Nearly 20% of global oil trade passes through this narrow waterway, making any disruption a major concern for international energy markets.

Read More: Ninth Consecutive Night: US Strikes Intensify in Iran Amid Rising Tensions

Iran's Islamic Revolutionary Guard Corps (IRGC) claimed on Monday that two oil tankers exploded and became disabled while attempting to travel through what it described as an unsafe southern route in the Strait of Hormuz. According to the IRGC, the vessels had been encouraged by the U.S. military to use that passage.

However, Reuters could not independently verify the reported incident.

Shipping Risks Continue to Increase

In recent days, both Washington and Tehran have taken actions affecting commercial shipping in the region.

The United States says it is enforcing a naval blockade on Iranian ports, while Iran maintains it is targeting vessels that violate its navigation rules in the Strait of Hormuz.

Adding to concerns, the United Kingdom Maritime Trade Operations (UKMTO) reported early Monday that a vessel was on fire northwest of Oman's Kumzar, although further details were not immediately available.

Fewer Tankers Crossing the Strait

Shipping activity through the Strait of Hormuz has already started to slow.

According to LSEG data, only four vessels transited the Strait on Sunday, compared with eight vessels the previous day. Despite the slowdown, at least three oil-product tankers and one Very Large Crude Carrier (VLCC) have entered the Strait since Friday to load crude oil.

A prolonged decline in tanker traffic could tighten global oil supplies if the conflict continues to intensify.

Analysts Warn of Greater Market Risks

Energy analysts believe oil markets may still be underestimating the potential impact of the conflict.

Analysts at ING said Brent crude breaking above $90 per barrel reflects the absence of any signs of de-escalation in the Gulf. They warned that if military exchanges between the U.S. and Iran continue unchecked, the region could face wider attacks that would further threaten oil exports.

Meanwhile, Barclays analyst Amarpreet Singh noted that the coming days and weeks will provide a clearer picture of how much oil can continue to leave the region under the current dual blockades. He added that global oil inventories are already at their tightest levels in the past five years, leaving markets increasingly vulnerable to supply disruptions.

Global Energy Markets on Alert

The renewed geopolitical tensions have once again placed the global energy market on edge. Investors are closely monitoring developments in the Middle East, particularly around the Strait of Hormuz, where any prolonged disruption could further push up crude oil prices, increase fuel costs, and impact inflation worldwide.

With military activity showing no immediate signs of easing, energy markets are expected to remain highly volatile in the coming days.