Oil prices extended their gains on Monday as renewed US-Iran hostilities involving vessels in and around the Strait of Hormuz heightened concerns that disruptions to Middle East energy supplies could last for an extended period.
Brent crude futures rose 52 cents, or 0.54%, to $96.80 a barrel by 2354 GMT. US West Texas Intermediate (WTI) crude also moved higher, gaining 66 cents, or 0.72%, to $92.14 a barrel.
The latest increases came after a strong week for oil markets. Brent rose 7.8% last week, while WTI gained nearly 10% as renewed attacks affected shipping and reduced oil flows through the strategic waterway.
Strait of Hormuz Disruptions Fuel Market Concerns
The Strait of Hormuz is one of the world’s most important oil shipping routes. Before the conflict, roughly one-fifth of global oil supplies passed through the narrow waterway, making any prolonged disruption a major concern for energy markets.
The latest escalation has involved both military and commercial vessels. US forces struck three Iranian oil tankers on Saturday, according to US Central Command. One of the vessels was hit off the coast of Kharg Island, near one of Iran’s key oil export hubs.
Iran’s Islamic Revolutionary Guard Corps Navy, meanwhile, said it had targeted three oil tankers travelling through what it described as unauthorised routes in the Strait of Hormuz, as well as three additional US vessels elsewhere.
Maritime intelligence firm Marisks described the attacks as a major escalation in the maritime conflict. The firm said commercial tankers were increasingly becoming part of the reciprocal economic pressure between the two sides, blurring the traditional distinction between military confrontation and commercial shipping.
Tanker Traffic Falls to Lowest Level Since May
The growing security risks have already affected traffic through the Strait of Hormuz.
Data from analytics firm Kpler showed that an average of just 10 commodity ships passed through the waterway each day over the previous 10 days. That was the lowest level recorded since May.
Oil Prices Tumble as Hormuz Reopening Hopes Grow
The decline in shipping activity has raised concerns among traders and energy analysts that the disruption could continue to restrict oil exports from the region.
Iranian state media reported that Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, said a restricted zone would be announced outside the Strait of Hormuz in the coming days. Details of the proposed zone and its potential impact on commercial shipping were not immediately clear.
OPEC+ Keeps October Policy Unchanged
Against this backdrop, OPEC+ decided on Sunday to keep its oil output policy unchanged for October.
The producer group said it would need to agree on new quotas before determining its next steps on production. The decision comes as oil markets remain highly sensitive to developments in the Middle East and the possibility of further supply disruptions.
Analysts Expect Disruptions to Continue
ANZ analysts said a prolonged standoff involving calibrated military action by the United States and Iran appeared to be the most likely scenario. Such a situation, they warned, could delay the recovery of Middle East oil supplies.
The analysts expect exports to remain constrained through the remainder of 2026, followed by a gradual reopening toward the end of the fourth quarter.
They also said oil flows were unlikely to return to pre-war levels until late in the first quarter or early in the second quarter of 2027.
For now, the prospect of sustained disruption through the Strait of Hormuz remains a key factor driving oil prices. Any further escalation involving energy infrastructure or commercial shipping could add additional pressure to global crude markets, while signs of de-escalation could ease some of the recent gains.
