Oil Prices Jump Over 3% After US Strikes Iran, Tehran Retaliates

Oil prices rose more than 3.5% on Monday after the United States struck two launchers on Iran’s Larak Island in the Strait of Hormuz and Tehran said it had retaliated by attacking US air bases in Jordan. The renewed military action heightened concerns over further disruption to oil supplies and shipping through the strategic waterway.

Brent crude futures were up $3.15, or 3.58%, at $91.25 a barrel at 0903 GMT, while US West Texas Intermediate (WTI) crude rose $2.96, or 3.55%, to $86.36. Reuters reported that the gains came as markets assessed the impact of renewed US-Iran hostilities on oil flows and the prospects for reopening the Strait of Hormuz.

US forces struck two launchers on Iran’s Larak Island in the Strait of Hormuz on Sunday, in the first known American strikes on the country since late July.

Iran attacked two US air bases in Jordan in response, Iranian media reported on Monday, citing Iran’s Revolutionary Guards.

"Renewed military strikes in the Middle East and concerns of further oil supply disruptions have lifted oil prices," said UBS analyst Giovanni Staunovo, adding that markets will now focus on whether the situation de-escalates or not.

US President Donald Trump said in a social media post on Sunday that Iran’s energy hub of Kharg Island was being "blown to smithereens". There was, however, no evidence that the island was under attack. The post included an AI-generated video but provided no further details.

Iran denied that Kharg Island had been attacked and said its oil operations were continuing.

Hormuz shipping remains a concern

Efforts to negotiate an end to the conflict remain stalled as mediators seek to reopen the Strait of Hormuz, through which a fifth of global oil supplies passed before the war began at the end of February.

Shipping data showed that the number of visible commodity vessels transiting the strait fell to five a day over the weekend. The decline highlighted caution among operators concerned about attacks on shipping.

The United Kingdom Maritime Trade Operations agency said on Sunday that a tanker had been struck by a projectile while entering the strait on Saturday.

US Treasury Secretary Scott Bessent told Reuters on Sunday that the United States was likely to impose new secondary sanctions on Iran every week.

Thin trading amplifies price move

Saxo Bank analyst Ole Hansen said thin trading volumes due to a public holiday in the United Kingdom had amplified Monday’s market reaction.

Despite Monday’s rise, Brent and WTI remained on track to post modest losses for August after falling more than 4% last week, their first weekly declines in three weeks.

Trump also said on Sunday that oil secured under a recently struck deal with Venezuela would be used to replenish the US Strategic Petroleum Reserve, which has fallen to near its lowest level in 44 years.