Oil climbs 6% as U.S.-Iran tensions flare around Hormuz

Oil prices surged over 6% on Monday, driven by renewed tensions around the Strait of Hormuz after exchanges of accusations between the U.S. and Iran. Brent crude futures rose to about $96.49 a barrel and U.S. WTI climbed to roughly $90.38, signaling market nerves as the world’s key energy chokepoint remains contested. The strait, a major artery for global oil flows, accounts for roughly one-fifth of supply, amplifying concerns about sustained volatility as shipments face disruption.

The latest flare‑up saw the United States claim that American forces had seized an Iranian cargo ship attempting to breach a blockade, while Iran rejected renewed peace talks and signaled it would not participate in a second round. Earlier, Tehran tightened its grip on the Strait in response to the blockade, reportedly firing on several vessels and declaring the route closed, just hours after it had announced a temporary reopening during a 10‑day ceasefire.

Analysts at Macquarie warned that even if tensions ease, prices are likely to stay supported in the mid‑$80s to $90s range, with potential moves toward $110 if supply remains constrained through the Strait. The market’s reaction has emphasized that movements hinge more on headlines than on clear improvements in supply conditions, keeping risk premium elevated.

Industry observers note that a full recovery in oil flows could take months, and any easing of tensions is unlikely to erase the structural risk around Hormuz. Traders will remain sensitive to naval developments, sanctions, and any new terms of a ceasefire as they weigh supply risks against demand dynamics.

In short, the current spike underscores how geopolitical shocks can rapidly translate into price moves, with markets keeping a wary eye on the Strait of Hormuz and the next steps toward de‑escalation.

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