Oil prices jumped more than 2% on Monday as fighting between the United States and Iran disrupted shipping through the Strait of Hormuz.
Brent crude climbed above $90 a barrel for the first time in weeks.
According to Reuters, Brent futures rose $2.09, or 2.37%, to $90.19 a barrel by 0241 GMT — the highest level since June 11.
The benchmark had already gained 15.9% last week, its biggest weekly increase since April.
U.S. West Texas Intermediate crude also advanced, rising $1.71, or 2.07%, to $84.20 a barrel — its highest level since June 12.
WTI posted a 15.5% gain last week, its strongest weekly performance since early March.
The rally followed a fresh escalation across the Middle East.
The United States carried out a ninth consecutive night of strikes against Iran over the weekend, while U.S. allies Kuwait and Bahrain also reported new Iranian attacks.
What The Analysts Are Saying
ING analysts said in a note on Monday that “ICE Brent broke above $90 per barrel this morning with no let-up in the escalation in the Gulf.”
They added that if the fighting continues unchecked, “we could return to an environment of wide-scale attacks across the Gulf.”
Barclays analyst Amarpreet Singh struck a more cautious tone.
“The coming days and weeks will provide a clearer picture of the sustainable level of oil exports from the region under renewed dual blockades,” Singh said.
He added that oil markets remain too complacent about the potential fallout for inventories, which sit at their tightest level in five years.
The Strait of Hormuz is a narrow waterway between Iran and Oman that carries about one-fifth of global oil trade, making it one of the world’s most important energy chokepoints. Any disruption there tends to push prices higher because so much crude has no easy alternative route.
Tankers Hit As Blockade Tightens
The Islamic Revolutionary Guard Corps said two oil tankers exploded and lost power on Monday after trying to sail through what it called an “unsafe southern route” in the strait.
Iran alleged the vessels had been “encouraged by the U.S. military” to use that passage.
Washington said it was enforcing a naval blockade on Iranian ports, a measure meant to cut off Iran’s oil exports and pressure its government. Iran, in turn, maintained it was targeting vessels that broke its navigation rules in the strait.
Separately, the UK Maritime Trade Operations agency reported early Monday that a vessel was on fire northwest of Oman’s Kumzar.
Shipping through the strait also slowed. Four vessels transited the strait on Sunday, down from eight the previous day, according to data from the London Stock Exchange Group.
At least three oil products tankers and one Very Large Crude Carrier entered the waterway since Friday to load crude, the data showed.
