Brent crude oil futures traded above $90 a barrel on Monday morning as increased hostilities between the US and Iran raised concerns over global oil supplies, according to a report by The Hindu BusinessLine.
Price Movements
At 9:28 am on Monday, September Brent oil futures on ICE were at $90.27, up by 2.46%, while September crude oil futures on WTI (West Texas Intermediate) were at $83.64, up by 2.27%. On the Multi Commodity Exchange (MCX) in India, July crude oil futures traded at ₹8,131 against the previous close of ₹7,945, up by 2.34%, and August futures at ₹8,097 against the previous close of ₹7,910, up by 2.36%.
| Contract | Previous Close | Current Price | Change (%) |
|---|---|---|---|
| ICE Brent Sept | — | $90.27 | +2.46% |
| WTI Sept | — | $83.64 | +2.27% |
| MCX July Crude | ₹7,945 | ₹8,131 | +2.34% |
| MCX Aug Crude | ₹7,910 | ₹8,097 | +2.36% |
Supply Disruptions
The escalation follows a statement by the US Central Command that its forces successfully completed the ninth consecutive evening of strikes against Iran on July 19. The strikes targeted Iranian military command centres, air defence and coastal surveillance sites, maritime capabilities, missile and drone launch sites, and communications networks to further diminish Iran’s ability to attack commercial vessels and civilian mariners transiting the Strait of Hormuz.
In their Commodities Feed for Monday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said ICE Brent broke above $90 a barrel on Monday morning with no let-up in the escalation in the Persian Gulf. The US and Iran continue to exchange strikes, which are proving deadly for both sides.
“If this escalation goes unchecked, we could return to an environment of wide-scale attacks across the Persian Gulf. Vessel flows have essentially ground to a halt. LSEG data show that only two outbound visible oil tankers transited the Strait of Hormuz, with no inbound traffic. Flows are essentially back to where they were before the Memorandum of Understanding,” they said.
Meanwhile, reports indicate that Iran told the Houthis in Yemen to essentially shut the Bab el-Mandeb Strait if the US attacks Iranian power infrastructure. This strait is important for vessel movements through the Red Sea. The Saudis have relied heavily on this route since the war began to bypass the Strait of Hormuz. If closure occurs, tankers would have to enter and exit the Red Sea via the Suez Canal, making Saudi oil exports to Asia a lengthier and costlier affair, according to the analysts.
Demand and Strategic Reserves
The oil market faces additional vulnerability as SPR (strategic petroleum reserve) releases, which have offered some relief during the war, are set to cease around the end of this month. However, the US may be willing to tap further, given that the 172 million barrels it’s in the process of releasing are structured as an exchange rather than a pure release. Those barrels will be returned to the SPR plus interest in the form of additional supply, ING Think noted.
Outlook
The combination of declining SPR releases and potential strait closures leaves the market exposed to further price spikes. Traders will watch for any diplomatic moves or additional strikes that could alter supply routes. Key data to monitor include weekly US EIA inventory reports and tanker tracking through the Strait of Hormuz and Bab el-Mandeb.
The breaking of the $90 level in Brent signals renewed geopolitical risk premium. For commodity traders and procurement teams, the immediate focus remains on the trajectory of US-Iran military actions and their impact on tanker flows through critical chokepoints.
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