Oil prices jumped more than 3% on Monday after U.S. forces struck two Iranian rocket launchers on Larak Island, reviving fears of a wider disruption to shipping through the Strait of Hormuz. Brent crude traded above $90 a barrel as President Trump threatened further strikes on Iran's main export terminal.
Strikes on Larak Island push crude higher
Oil prices rose sharply Monday after U.S. forces struck two Iranian rocket launchers on Larak Island on Sunday, marking a return to direct combat between Washington and Tehran. Brent crude futures for September delivery gained 2.5% to trade at $90.34 a barrel. U.S. West Texas Intermediate futures added 2.7% to $85.62 a barrel.
A U.S. Central Command spokesperson said Islamic Revolutionary Guard Corps forces had been observed preparing to launch rockets carrying sea mines into the Strait of Hormuz. According to the Associated Press, Sunday's attack was the first publicly acknowledged U.S. strike on Iranian positions since late July.
Iran claims retaliation, Trump threatens Kharg Island
Iran's Revolutionary Guards Corps said the U.S. attack on Larak Island killed and wounded several of its soldiers, and that it had responded with attacks on American military bases in Jordan, based on reports by Iranian media. Trump then extended his threats to Kharg Island, Iran's main oil export terminal, saying in a Sunday evening Truth Social post that Kharg Island is "going to be blown to smithereens!"
Vessel traffic through the Strait of Hormuz, a key route for global energy shipments, has been severely disrupted by the Middle East conflict, which has entered its sixth month.
Supply risk seen persisting
Tamas Varga, an analyst at PVM Oil Associates, said supply risk would keep building and oil inventories would keep shrinking in the weeks and months ahead, adding that the crisis has likely reset the security balance in the Middle East. Separately, Goldman noted that mounting strikes on refineries across the Middle East and Russia have squeezed an already-tight global refining system, driving refined product margins to new highs.
Source: CNBC
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