Oil prices surge following exchange of blows between the US and Iran
US forces attacked launchers in the Strait of Hormuz, the Revolutionary Guards fired missiles at bases in Jordan, and talks are stalled. Fears of a global energy crisis are growing: shipping companies are clearing the strait, a tanker was damaged, and the price of a barrel of oil jumped to over $90.
Oil prices jumped this morning, Monday, by more than 2% following the United States' attack against an Iranian island in the Strait of Hormuz, which led to a military response from Tehran. Brent crude oil contracts rose by $2.51 (2.85%) to a level of $90.61 per barrel. At the same time, US WTI crude oil rose by $2.13 (2.55%) and is trading at a level of $85.53 per barrel.
The current escalation began when US forces attacked two launchers on the Iranian island of Larak in the Strait of Hormuz. This is the first overt US attack against Tehran since late July. In response to this action, Iran attacked two US Air Force bases in Jordan, as reported by Iranian media citing a statement from the Revolutionary Guards.
Against this backdrop, negotiations to calm the conflict have reached a dead end. Mediators are trying to work toward reopening the Strait of Hormuz — a central shipping artery through which one-fifth of global oil production flowed before the outbreak of the war at the end of February. Simultaneously, US Treasury Secretary Scott Bessent clarified that Washington is expected to impose new secondary sanctions on Iran every week, with the goal of completely cutting off the Islamic Republic from the international financial system based on the dollar.
Despite the current surge, Brent and WTI crude are expected to end the month of August with slight declines, after losing more than 4% last week.
Meanwhile, shipping data shows that caution among transport companies is increasing: the number of commercial vessels seen sailing in the Strait of Hormuz during the weekend dropped to only five per day.
A report by the United Kingdom Maritime Trade Operations confirmed the fears after an oil tanker was hit by a flying object while sailing in the strait.
On the other hand, US President Donald Trump announced that oil from a deal recently signed with Venezuela will be used to fill the US Strategic Petroleum Reserve, which has shrunk to a level near a 44-year low.
