U.S.-Iran tensions drive up international oil prices as markets warn of potential shipping crisis in the Strait of Hormuz
Reuters report: After the U.S. struck Iran's Larak Island in the Strait of Hormuz, Iran retaliated, pushing global oil prices up by over one dollar per barrel on Monday.
At 00:40 GMT, Brent crude futures rose $1.08 (1.23%), closing at $89.18 per barrel; West Texas Intermediate (WTI) crude gained $0.92, or 1.10%, settling at $84.32 per barrel.
IG market analyst Tony Sycamore said: “The situation appears to be entering a new phase of escalation. The duration of the conflict remains uncertain—could last just a few days, or extend for several weeks.”
Sycamore pointed out that technical indicators suggest if tensions further intensify and push WTI above the resistance level of $85.80–$85.90, upward momentum would be unleashed: first targeting last week’s high of $87.69, then challenging the July peak of $93.50.
Truce negotiations have stalled, with mediators urgently working to restore navigation through the Strait of Hormuz. Prior to the outbreak of conflict in late February, one-fifth of global oil exports passed through this vital waterway.
Australia & New Zealand Banking Group analysts wrote in their client report: “Although the outlook for a strait transit agreement remains unclear, a slight rebound in recent oil shipments has somewhat eased market panic over supply disruptions.”
Data released by shipping agencies on Monday showed that the number of large cargo vessels passing through the Strait of Hormuz dropped to just five per day over the weekend, as shipping companies remain cautious due to ongoing attack risks.
The UK Maritime Trade Operations reported on Sunday that a tanker traversing the strait was attacked by ordnance on Saturday.
In summary, current international oil prices are deeply tied to geopolitical risks in the Middle East. As long as U.S.-Iran military confrontations persist and meaningful navigation through the Strait of Hormuz remains un-restored, the crude market will continue facing fears of supply disruption, likely keeping prices elevated with potential for further increases.
Currently, ceasefire talks aimed at ending the conflict have come to a complete standstill. Iran refuses unilateral concessions, clearly stating it will only reopen the strait once the U.S. abandons its maximum pressure policy and lifts maritime blockades.
Original source: toutiao.com/article/1875011260404746/
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