Oil prices surged as renewed hostilities between the United States and Iran escalated, with both sides conducting fresh strikes and issuing contradictory reports regarding the status of the Strait of Hormuz. Brent crude, the international benchmark, traded above $79 a barrel after experiencing a 5.4% gain last week, while West Texas Intermediate (WTI) climbed to nearly $74. The escalation came after an interim peace deal last month had led to a decrease in oil prices, reflecting expectations of increased supply from the Persian Gulf.
The International Energy Agency (IEA) warned that the renewed conflict risks undermining efforts to replenish global oil inventories later this year, highlighting the economic stakes involved. Traffic through the Strait of Hormuz, a critical waterway for approximately one-fifth of global crude and liquefied natural gas supplies, was described as almost nonexistent on Monday, continuing a slowdown from the previous week. Despite Iran's claim that the strait would be closed indefinitely, US Central Command (CENTCOM) asserted its forces were conducting additional attacks to ensure freedom of navigation.
The latest US strikes, the fourth in a week, were reportedly in response to an Iranian attack on a Cyprus-flagged container ship. CNN also reported Iranian forces firing on commercial vessels, with US aircraft intercepting an Iranian cruise missile and attack drone. The heightened tensions have cast a shadow over diplomatic prospects; Iran's Parliament Speaker, Mohammad Bagher Ghalibaf, declared the "era of one-sided deals is OVER," while US President Donald Trump stated the ceasefire was "OVER" but expressed willingness to negotiate. Analyst Saul Kavonic from MST Marquee suggested oil prices would likely continue to inch higher as long as the strikes persist and passage through the strait remains uncertain, adding that prices could reach $100 if the conflict expands to target broader energy infrastructure in the region.
