Oil prices jumped 3% on Monday, with Brent crude surpassing $90 a barrel, as the United States and Iran expanded attacks in the Middle East that have curbed energy shipments in the Strait of Hormuz, according to a report by Reuters carried by The Hindu BusinessLine.
Price Surge and Key Levels
Brent crude futures climbed $2.69, or 3.05%, to $90.79 by 2343 GMT, touching the highest since June 11, extending gains after rising 15.9% last week — its biggest weekly gain since April, the report said. US West Texas Intermediate (WTI) crude was at $84.68 a barrel, up $2.19, or 2.65%, the highest since June 12. Front-month WTI prices gained 15.5% last week, the largest weekly ascent since early March.
Geopolitical Drivers
The Middle East conflict escalated over the weekend, with the US conducting a ninth straight night of attacks against Iran, while US allies Kuwait and Bahrain reported more Iranian strikes, the report noted. In recent days, both sides have taken aim at shipping traffic: the US said it is enforcing a naval blockade on Iranian ports, and Iran said it targets vessels violating its rules on navigating the Strait of Hormuz, which usually handles one-fifth of global oil trade. A vessel was on fire northwest of Oman’s Kumzar, the United Kingdom Maritime Trade Operations agency said early on Monday.
Supply Disruptions and Transit Data
The Strait of Hormuz, a critical chokepoint for oil shipments, has seen a sharp drop in traffic. LSEG data showed that four vessels made the transit through the strait on Sunday, down from eight the previous day. At least three oil products tankers and one Very Large Crude Carrier have entered the strait since Friday to load oil, the data showed.
Inventory and Market Outlook
Barclays analyst Amarpreet Singh said in a note:
“The coming days and weeks will provide a clearer picture of the sustainable level of oil exports from the region under renewed dual blockades. As things stand, we think oil markets are still too complacent about the potential fallout for inventories, which, unlike at the beginning of the war, are at the tightest of the past five years.”
The report highlighted that the dual blockades — US and Iranian — are curbing oil exports, with inventories already at multi-year lows. The market's complacency, as noted by Singh, suggests further price volatility ahead as traders assess the actual impact on global supply.
Implications for Traders and Analysts
For commodity traders and procurement teams, the 15.9% weekly surge in Brent underscores the rapid repricing of geopolitical risk in the Middle East. The Strait of Hormuz disruption directly affects crude and products tankers, with transit numbers halving in a day. The tightest inventories in five years amplify price sensitivity to any further supply loss. Analysts will watch weekly US EIA data and OPEC+ responses, though no such data is yet available in the source. The conflict's trajectory remains the dominant driver for crude prices in the near term.
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