Oil Prices Rise as US-Iran Strikes Raise Fears of Prolonged Hormuz Disruption

Oil prices rose on Monday as renewed attacks between the United States and Iran involving vessels in and around the Strait of Hormuz increased concerns that disruption to Middle Eastern oil supplies could persist.

Brent crude futures gained 79 cents, or 0.82 percent, to reach $97.07 a barrel by 8:12 a.m. Saudi time. US West Texas Intermediate crude increased 80 cents, or 0.87 percent, to $92.28 a barrel.

The latest gains followed a sharp rise last week. Brent advanced 7.8 percent, while WTI climbed almost 10 percent after US and Iranian forces resumed attacks. The fighting has reduced oil flows through the Strait of Hormuz, a crucial shipping route through which around one-fifth of global oil supplies previously passed.

US Central Command said American forces struck three Iranian oil tankers on Saturday. One of the vessels was hit near Kharg Island, an important Iranian oil export centre.

Iran’s Islamic Revolutionary Guard Corps navy said it had targeted three oil tankers travelling through what it described as unauthorized routes in the Strait of Hormuz. It also said three additional US vessels had been targeted in other locations.

Maritime intelligence firm Marisks described the attacks as a major escalation in the conflict at sea. The company said commercial tankers were increasingly becoming part of the confrontation, making it harder to distinguish between military operations and attacks affecting commercial shipping.

Shipping activity through the strait has already fallen sharply. Data from analytics firm Kpler showed that an average of 10 commodity ships crossed the waterway each day over the past 10 days, the lowest level since May.

Priyanka Sachdeva, head of market insights at Phillip Nova, said a further decline in tanker traffic could trigger a much larger supply shock, adding that early signs of reduced activity were already emerging.

Iran is also preparing further restrictions around the strategic waterway. Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, said on Sunday that a restricted zone outside the Strait of Hormuz would be announced in the coming days, according to Iranian state media.

Meanwhile, OPEC+ agreed to keep its oil output policy unchanged for October at a meeting on Sunday. The group said new production quotas would need to be agreed before decisions could be made about subsequent output levels.

Analysts at ANZ said a prolonged standoff combined with limited military action by both sides appeared to be the most likely scenario. They expect Middle Eastern exports to remain restricted through the rest of 2026, with a gradual reopening possible late in the fourth quarter.

The analysts said oil flows may not return to pre-conflict levels until late in the first quarter or early in the second quarter of 2027, keeping pressure on global energy markets.