Crude Oil Prices Jump as US-Iran Tensions Escalate, Brent Nears $90 a Barrel

Crude oil prices climbed sharply on Monday as renewed military tensions between the United States and Iran raised fresh concerns over energy supplies from the Middle East. The latest escalation, involving attacks and counterattacks, has brought the strategically important Strait of Hormuz back into focus for global oil markets.

Oil prices rose by more than $1 a barrel in early trading after the US military carried out an attack on Iran's Larak Island in the Strait of Hormuz. Iran subsequently responded with attacks targeting two US air bases in Jordan, according to Iranian media citing the country's Revolutionary Guards.

The renewed escalation comes after crude oil prices recorded a decline of more than 4% in the previous week.

According to a Reuters report cited in the original report, Brent crude futures gained $1.08, or 1.23%, to reach $89.18 per barrel. US West Texas Intermediate (WTI) crude also moved higher, rising 92 cents, or 1.10%, to $84.32 per barrel.

US Strike on Iranian Island Raises Supply Concerns

The latest increase in crude prices followed reports that the US military targeted two launchers on Iran's Larak Island on Sunday.

The island is located in the Strait of Hormuz, one of the world's most strategically important routes for energy transportation. The attack was described as the first known US strike on the Gulf country since an earlier operation in late July.

The development quickly triggered a response from Tehran. Iranian media, citing the Revolutionary Guards, reported on Monday that Iran had struck two American air bases in Jordan.

These developments have added another layer of uncertainty to a conflict that has now entered its sixth month.

Why the Strait of Hormuz Matters for Oil Prices

The Strait of Hormuz is closely watched by global energy markets because disruptions along the route can affect the transportation of oil and other commodities.

The latest shipping data cited in the report indicates that companies have already become increasingly cautious about using the waterway.

During the weekend, the number of commodity vessels passing through the Strait of Hormuz reportedly declined to around five per day. The fall in traffic suggests that shipping operators are taking additional precautions amid fears that commercial vessels could be caught up in the escalating conflict.

Concerns increased further after a tanker was reportedly hit by a projectile while travelling through the strategically important route on Saturday.

Any prolonged disruption to shipping through the area could add uncertainty to global oil supplies, which in turn could influence international crude prices.

Crude Oil Could Rise Further if Conflict Intensifies

Market experts are closely monitoring whether the latest increase in crude prices develops into a broader upward trend.

The Reuters report cited IG market analyst Tony Sycamore as saying that further escalation between the United States and Iran could create room for additional gains in oil prices.

WTI crude is also approaching an important technical level. According to the analysis cited in the report, a move above the resistance zone of around $85.80 to $85.90 per barrel could potentially open the way for further upward movement.

However, the direction of oil prices is likely to remain closely linked to geopolitical developments in the Middle East and the situation surrounding the Strait of Hormuz.

US-Iran Peace Talks Remain Stalled

The renewed military activity comes at a time when attempts to end the conflict have yet to produce a breakthrough.

Talks aimed at resolving the confrontation between the United States and Iran remain stalled, while mediators are continuing their efforts to facilitate the reopening of the Strait of Hormuz.

According to the report, the conflict began in late February 2026 and has since continued for several months. The latest exchange of attacks has reduced expectations of an immediate de-escalation and brought geopolitical risk back to the centre of the global energy market.

A prolonged conflict could keep crude oil prices volatile, particularly if shipping activity through the Strait of Hormuz faces further disruption.

Oil Prices Fell More Than 4% Last Week

The latest rally comes after a significantly weaker week for crude oil.

Oil prices declined by more than 4% during the previous week, highlighting the sharp swings currently being seen in the energy market.

The reversal on Monday demonstrates how quickly geopolitical developments can change sentiment among oil traders. While crude prices had been under pressure only days earlier, renewed concerns about military escalation and possible supply disruption pushed prices sharply higher.

Brent's move to $89.18 per barrel also brings the international benchmark closer to the psychologically important $90 level.

What Could Determine Crude Oil Prices Next?

The immediate outlook for the oil market is likely to depend heavily on developments between Washington and Tehran.

Any further military escalation, attacks on shipping or prolonged disruption to the Strait of Hormuz could increase concerns about the availability and transportation of crude oil. Such developments may provide additional support to international oil prices.

On the other hand, progress in negotiations or successful efforts by mediators to restore normal shipping conditions could ease some of the geopolitical risk currently being factored into crude prices.

For now, investors and energy markets will be closely watching the Strait of Hormuz as well as any fresh military or diplomatic developments between the United States and Iran. With Brent already approaching $90 a barrel, further escalation could keep crude oil prices volatile in the coming sessions.