Oil Jumps as US-Iran Military Strikes Threaten Hormuz Shipments

Oil prices surged over 4% on Monday as energy shipments via ​the Strait of Hormuz remained under threat, with the U.S. and ‌Iran announcing renewed military strikes. Brent crude futures climbed US$3.10, or 4.08%, to US$79.11 by 0325 GMT, while U.S. West Texas Intermediate crude rose US$2.95, or 4.11%, to US$74.36 a barrel.

U.S. forces completed another wave of strikes ​against Iran on Sunday, hitting dozens of targets at multiple locations with ​precision munitions, the Central Command said. Iran's Revolutionary Guards said on ⁠Monday they attacked U.S. military bases in Kuwait and Bahrain.

U.S. President Donald Trump said ​on Sunday that the Strait of Hormuz is open to commercial traffic, although Iran ​declared earlier that it closed the strait after a vessel traveled on an unapproved route and was struck.

Some 20% of the world's oil and liquefied natural gas transited the strait before ​the war began at the end of February. Six vessels transited the strait on ​Sunday, ship-tracking data from Kpler showed, the lowest number in five weeks.

The escalating attacks cast further ‌doubt ⁠on the future of an interim U.S.-Iranian agreement signed last month that aimed to reopen the strait and end the war after a further 60 days of negotiations. Following the agreement, global oil supply rose by 4.1 million barrels per day in ​June, but remained 9.4 ​million bpd below ⁠pre-war levels, the International Energy Agency said in its monthly report on Friday.

"Hopes of a relatively quick resolution to the recent ​skirmishes may be in doubt after tension escalated over the ​weekend," ANZ ⁠analysts said in a note. IG market analyst Tony Sycamore said the relatively tame rise in oil prices suggested the market was taking the view that the current flare-up ⁠represented an ​escalation within a fragile truce and fell well ​short of a complete collapse of the ceasefire. "How accurate that view is remains to be seen," he ​said in a note. - Reuters