Oil Surges Over 2% as US-Iran Hostilities Escalate in Strait of Hormuz

Crude oil prices climbed by more than 2% on Monday following a fresh round of military escalation between the United States and Iran in the Strait of Hormuz, as the conflict enters its sixth month.

Price movements and technical outlook

By 0436 GMT, Brent crude futures surged $2.21, or 2.51%, to $90.31 per barrel. West Texas Intermediate (WTI) advanced $1.83, or 2.19%, to $85.23 per barrel.

IG market analyst Tony Sycamore stated: “It appears we are entering another phase of escalation. It is impossible to determine how long this will last — it could be days or weeks.”

Sycamore noted that technical charts indicate further gains could follow if WTI breaks above the resistance level of $85.80–$85.90 per barrel. Such a move would first target last week’s high of $87.69, then July’s peak of $93.50.

Military action and maritime incidents

US forces struck two launch platforms on Iran’s Larak Island in the Strait of Hormuz on Sunday.

According to the UK Maritime Trade Operations (UKMTO), an oil tanker was hit by a projectile while transiting the strait on Saturday.

Shipping data released Monday showed only five cargo vessels were observed passing through the Strait of Hormuz at the start of the week — a marked decline reflecting heightened corporate caution over potential attacks.

Negotiations and supply concerns

Efforts to end the conflict remain stalled, while mediators continue working to reopen the Strait of Hormuz — a waterway that previously carried one-fifth of global oil supplies before hostilities erupted at the end of February.

ANZ Bank analysts wrote in a client note: “The path toward an agreement to reopen the Strait of Hormuz remains unclear, particularly as increased oil flows through the strait have helped temper concerns about supply disruptions.”

Market expectations for August

Both Brent and WTI are projected to post modest declines in August, following last week’s drop of more than 4% — their first weekly fall in three weeks.