Oil prices surged on Monday as nine consecutive nights of US airstrikes against Iran and a series of incidents targeting shipping in the Strait of Hormuz sent Brent crude above $90 a barrel for the first time since June. Brent futures climbed more than two per cent to around $90.50 in early Asian trading, extending gains of nearly 16 per cent from the previous week — the benchmark's largest weekly rise since April. US West Texas Intermediate crude also rose, trading above $84 a barrel.
The escalation intensified over the weekend, with the US military targeting Iranian military command centres, air defence installations, missile and drone launch sites, and communications networks. The strikes came after Washington announced the deaths of three American service members — two killed in an Iranian attack on a US base in Jordan, and one in Iraq during the controlled detonation of a downed Iranian drone. US President Donald Trump said the attacks were carried out "in honour" of what he called "three great patriots." Iran's Revolutionary Guard responded with what it described as a "surprise attack" on an enemy command centre in Syria, while Kuwait and Bahrain both reported incoming Iranian strikes and activated air defences.
At the centre of the market alarm is the Strait of Hormuz, the narrow waterway between Iran and Oman that normally handles roughly one-fifth of global oil trade. Iran's Revolutionary Guard claimed on Monday that two oil tankers had exploded and been immobilised while attempting to transit the strait, alleging the vessels had been directed by the US military onto what it called an unsafe route — though the claim could not be independently verified. A vessel was also reported on fire northwest of Oman's Kumzar island. Shipping data showed only four vessels made the Hormuz transit on Sunday, down from eight the day before. US Secretary of State Marco Rubio accused Iran of using the strait as leverage, urging other nations to share the burden of protecting global shipping, while saying Washington remains open to a diplomatic solution provided it is "real" and durable.
The fighting has resumed despite an interim ceasefire agreement, which Iran's supreme leader Mojtaba Khamenei declared "worthless and invalid" on Saturday, while warning of "unforgettable lessons" if US attacks continue. US airstrikes on Saturday struck infrastructure in Iran's southern Hormozgan province, including an electricity and desalination plant and three bridges, one on a route to Bandar Abbas — Iran's main port near the narrowest point of the strait.
Analysts warn that markets may be underestimating the risks to global oil supply. With inventories already at their tightest levels in five years, any sustained disruption to flows through the strait could have significant consequences for global energy markets. "The coming days and weeks will provide a clearer picture of the sustainable level of oil exports from the region under renewed dual blockades," one Barclays analyst noted, adding that the potential fallout for inventories remains underpriced.