Oil prices jumped more than 1% on Monday after the US launched fresh attacks on Iranian targets, with Brent crude rising $1.08, or 1.23%, to $89.18 a barrel while US West Texas Intermediate (WTI) crude climbed 92 cents, or 1.10%, to $84.32 a barrel. The latest surge came after US forces struck two launchers on Iran's Larak island in the Strait of Hormuz on Sunday, marking the first known American strike on the Gulf nation since late July. This military action has intensified the Middle East conflict as it entered its sixth month, ending several weeks of relative calm in the region. Global benchmarks had fallen more than 4% last week, their first weekly decline in three weeks, as reported by The Times of India. Crude oil is heading toward the end of a highly volatile month, with Brent futures fluctuating within a range of nearly $17 a barrel, as reported by The Economic Times.
Iran has responded to the US strikes with attacks of its own, with Iranian forces launching attacks against US forces stationed in Jordan, with Iranian media reporting on Monday that Iran's Revolutionary Guards attacked two US air bases in Jordan in response to the American strikes, according to Business Standard. Jordan's armed forces said they intercepted eight missiles that entered the country's airspace early Monday, as reported by The Times of India. The latest developments have intensified the ongoing US-Iran war that began in late February 2026, with oil prices being influenced by intermittent efforts to broker an end to the conflict, along with Treasury Secretary Scott Bessent's pledge to intensify measures aimed at isolating Iran and putting further pressure on its economy. Despite the absence of a peace agreement, traders tracking shipments estimate that around 6 million to 8 million barrels of crude are still passing through the Strait of Hormuz each day, as reported by Live Mint.
The Strait of Hormuz handled oil and natural gas shipments equivalent to roughly one-fifth of global fuel consumption before the US-Iran war began, according to Reuters. However, after Iran worked to shut the waterway in response to the conflict, oil flows have dropped to about one-quarter of their pre-war level. Shipping data showed that the number of visible commodity vessels sailing through the strait fell to five a day over the weekend, reflecting greater caution among companies, as reported by The Times of India. The United Kingdom Maritime Trade Operations reported on Sunday that a tanker was struck by a projectile while sailing inbound through the strait on Saturday. The top US military commander overseeing the Middle East said late last week that American forces had removed Iranian mines from the Strait of Hormuz and declared the shipping lanes open, though Iran's semi-official Mehr news agency separately reported that shipping through a Tehran-approved route was continuing on a limited basis, with vessels reportedly paying tolls for passage. Goldman Sachs estimated recent total Gulf exports at 15 million to 16 million barrels per day, 7 million to 8 million bpd below pre-war levels but 5 million to 6 million above the lowest point in March.
The latest US strike came after Trump had said on August 1 that he would order the military to hold off on new strikes at the urging of Gulf allies Qatar, Saudi Arabia and the United Arab Emirates, as reported by The Times of India. The last US military strike on Iran was confirmed on July 29, when Washington said it had carried out a 'heavy wave of strikes' on dozens of Revolutionary Guard targets, including coastal surveillance and defence sites, according to The Times of India. The Trump administration said it would focus on economic pressure rather than military action to try to end the war with Iran, with the plan including threats to punish countries and entities that continue to do business with Tehran, as reported by The Times of India. The US move towards sanctions came as the administration considers lower munitions stockpiles after months of war, raising concerns that a prolonged conflict could weaken US military readiness in other parts of the world. US President Donald Trump said on Sunday that oil from a recently struck deal with Venezuela will be used to replenish the US Strategic Petroleum Reserve which has dropped near its lowest level in 44 years.
IG market analyst Tony Sycamore noted that "Looks like we are in another escalation phase. How long that lasts is impossible to determine. Could be days, could be weeks," as reported by Business Standard. Technical charts showed that if the conflict escalated and pushed WTI above resistance at $85.80 to $85.90 a barrel, it would open the way for further gains, initially to last week's $87.69 high followed by July's $93.50 high, Sycamore said. Brent and WTI are set to post small declines in August after falling more than 4% last week, in what was their first weekly decline in three weeks, according to Business Standard. While the path to a deal to reopen the strait is elusive, increases in oil flows through the Hormuz strait kept concern over supply disruption in check, ANZ analysts said in a client note, as reported by Business Standard. Goldman Sachs has separately warned that Brent could climb to $120 a barrel if shipping disruptions through the Strait of Hormuz, the world's most important oil transit route, persist, according to The Economic Times. Oil is up more than 40% this year after the six-month conflict launched by the US and Israel in late February crimped flows from the Persian Gulf, though talks between Iran and Oman, along with US economic measures against Tehran that proved less harsh than anticipated, have helped ease prices this week.
