Brent hits $90 as US-Iran attacks raise fears over Strait of Hormuz crude supplies

Brent crude futures jumped above $90 a barrel on Monday as fresh military action between the United States and Iran reignited concerns about global crude supplies. Brent rose $2.37, or 2.69 per cent, to $90.47 a barrel, while US West Texas Intermediate crude gained $2, or 2.4 per cent, to $85.40.

Fresh US-Iran strikes

Brent earlier climbed to $91.52 a barrel, its highest level since August 25, according to Oilprice.com. The rally followed the resumption of direct military action between Washington and Tehran. US forces struck two Iranian launchers on Larak Island in the Strait of Hormuz on Sunday, the first known US attacks on Iran since late July as the conflict entered its sixth month. Iranian media, citing the Islamic Revolutionary Guard Corps, reported that Iran subsequently attacked two US air bases in Jordan on Monday.

The renewed confrontation has raised fresh concerns over the security of the Strait of Hormuz, a vital global oil shipping route. About one-fifth of global oil supplies passed through the waterway before the war began at the end of February. Mediators have been seeking an agreement to reopen the Strait, but negotiations have stalled amid continuing hostilities. Shipping data showed the number of visible commodity vessels transiting the strait fell to five a day over the weekend, highlighting the disruption to maritime traffic.

Trump hardens language, Iran denies attack

US President Donald Trump intensified rhetoric over Iran’s energy infrastructure on Sunday, saying the country’s Kharg Island energy hub was being “blown to smithereens”. There was, however, no evidence that the island had been attacked. Iran denied that Kharg Island had come under attack and said oil operations there were continuing.

US Treasury Secretary Scott Bessent said on Monday that Washington’s sanctions on Iran were aimed at pressuring Tehran into negotiations. He told CNBC the objective was “to create the conditions that they will want to come to the table”.

Monthly drop expected despite rally

Despite Monday’s recovery, oil prices remained on track for modest monthly losses in August after falling more than 4 per cent last week. That would be the first monthly decline after three consecutive weeks of gains.

Concerns about supply could be partly eased by developments in Venezuela. Trump said on Sunday that oil secured under a deal with the South American country would be used to replenish the US Strategic Petroleum Reserve. Reuters said the SPR has fallen close to its lowest level in 44 years. Chevron, GE Vernova, India’s ONGC, Italy’s Eni and Colombia’s GeoPark are expected to sign final agreements in Venezuela following months of negotiations over energy projects in the OPEC member.

Traders continue to assess the impact of the Iran-US conflict on crude production, exports and shipping through the Strait of Hormuz, with any prolonged disruption threatening to put further upward pressure on global oil prices.