Oil prices extend gains as US-Iran attacks heighten supply disruption fears

Oil prices continued their upward momentum on Monday as escalating attacks between the United States and Iran on vessels in and around the Strait of Hormuz intensified concerns over prolonged disruptions to Middle Eastern energy supplies.

 

Brent crude futures rose 52 cents, or 0.54%, to $96.80 per barrel, while US West Texas Intermediate (WTI) crude gained 66 cents, or 0.72%, to $92.14 per barrel.

 

Oil markets recorded strong gains last week, with Brent rising 7.8% and WTI climbing nearly 10%, following renewed hostilities between Washington and Tehran that have significantly disrupted shipping activity through the Strait of Hormuz.

 

The strategic waterway previously handled around one-fifth of global oil supplies, but traffic has fallen sharply amid growing security risks.

 

Over the weekend, US forces reportedly struck three Iranian oil tankers, including one near Kharg Island, a key Iranian oil export hub. Meanwhile, Iran's Revolutionary Guard said it had targeted several oil tankers travelling through what it described as unauthorized routes in the Strait of Hormuz, along with additional US vessels elsewhere.

 

Maritime intelligence firm Marisks described the latest incidents as a significant escalation in the maritime conflict, warning that commercial shipping was increasingly being drawn into the confrontation as a tool of economic pressure.

 

Data from analytics firm Kpler showed that an average of just 10 commodity vessels crossed the Strait of Hormuz daily over the past 10 days, marking the lowest level since May.

 

Iran has also indicated plans to announce a restricted zone outside the Strait of Hormuz in the coming days, further raising concerns among shipping and energy markets.

 

Meanwhile, OPEC+ maintained its existing oil output policy for October during a meeting on Sunday, with the producer alliance yet to determine future production quotas.

 

Analysts at ANZ said a prolonged confrontation involving intermittent military action appeared increasingly likely, which could delay a full recovery in Middle Eastern oil supplies.

 

The bank expects regional exports to remain constrained for the rest of 2026, with a gradual reopening potentially beginning late in the fourth quarter. However, a return to pre-conflict oil throughput levels may not occur until late in the first or early in the second quarter of 2027.