Oil prices rose more than two per cent on Monday as renewed military attacks between the United States and Iran heightened concerns over possible disruptions to global crude supplies.
Brent crude futures 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 a barrel. Brent earlier climbed as high as $91.52 a barrel, its highest level since August 25, according to Oilprice.com.
Reuters reported that the latest rally followed the resumption of direct military action between Washington and Tehran, with US forces striking two Iranian launchers on Larak Island in the Strait of Hormuz on Sunday.
The strikes were the first known US attacks on Iran since late July, as the conflict entered its sixth month. Iran subsequently attacked two US air bases in Jordan, Iranian media reported on Monday, citing the Islamic Revolutionary Guard Corps.
The renewed confrontation has raised fresh concerns over the security of the Strait of Hormuz, a vital global oil shipping route. The market is reportedly now focused on whether the latest escalation will lead to a broader conflict or whether diplomatic efforts can secure a de-escalation and reopen the strategic waterway.
It was gathered that mediators have been seeking an agreement to reopen the Strait of Hormuz, through which about one-fifth of global oil supplies passed before the war began at the end of February.
However, negotiations have stalled amid the continuing hostilities. Shipping data showed that the number of visible commodity vessels transiting the strait fell to five a day over the weekend, highlighting the disruption to maritime traffic.
