Oil prices jump more than 2% as Strait of Hormuz tensions escalate
Photo: oil (Getty Images)
Oil prices rose more than 2% on Monday, August 31, following a new escalation between the United States and Iran. Brent crude topped $90 a barrel amid growing concerns over the situation in the Strait of Hormuz, according to Reuters.
Oil reacts to new strikes
Global oil prices started the week with a notable increase after US forces carried out strikes on Iranian targets in the Strait of Hormuz. Tehran responded by reporting an attack on two US air bases in Jordan.
As of 04:36 GMT, Brent crude futures had risen by $2.21, or 2.51%, to $90.31 a barrel. US West Texas Intermediate (WTI) crude gained $1.83, or 2.19%, to $85.23.
Strait of Hormuz in focus
Talks aimed at ending the conflict have stalled, while mediators continue working to restore shipping through the Strait of Hormuz. Before the war began in late February, roughly one-fifth of the world’s oil supplies passed through this route.
Shipping data showed that only about five visible commercial vessels a day passed through the strait over the weekend. This points to caution among carriers concerned about further attacks. The UK Maritime Trade Operations agency also reported that a tanker was hit by a projectile while passing through the strait on Saturday.
DBS analyst Souvro Sarkar believes the market is currently pricing in a contained confrontation rather than a prolonged escalation. At the same time, uncertainty surrounding the Strait of Hormuz could keep Brent crude in the $85–$95-a-barrel range.
US prepares new sanctions
New restrictions on Iran could provide another factor for oil markets. US Treasury Secretary Scott Bessent told Reuters that Washington is likely to impose new secondary sanctions on Tehran every week.
Meanwhile, US President Donald Trump said the United States plans to use oil from a new deal with Venezuela to replenish the US Strategic Petroleum Reserve, whose inventories have fallen to nearly their lowest level in 44 years.
Just days earlier, oil prices had plunged sharply. On August 26, global oil prices fell by about 3%, with Brent dropping to $86.28 a barrel and WTI falling to $80.29. The decline came amid expectations that shipping through the Strait of Hormuz could resume.
