Global oil prices climbed sharply on Monday after fresh military exchanges between the United States and Iran intensified tensions around the Strait of Hormuz, a vital route for global energy supplies.
Brent crude, the international oil benchmark, rose more than 4 percent to $79.26 a barrel, its highest level since June 22, as investors reacted to renewed hostilities.
The US Central Command (CENTCOM) said it carried out dozens of strikes on Iranian targets after accusing Tehran of attacking a Cyprus-flagged cargo vessel transiting the Strait of Hormuz.
In response, Iranian forces reportedly launched missile and drone attacks targeting the United Arab Emirates, Qatar, Kuwait, Oman and Bahrain.
Iran also renewed warnings to vessels using routes through the Strait of Hormuz that do not comply with its preferred navigation channels, saying such ships would not be guaranteed safe passage.
The renewed conflict has disrupted shipping through the strategic waterway, which normally handles about one-fifth of the world’s oil trade.
According to maritime intelligence platform Windward, vessel traffic through the strait has dropped significantly since fighting resumed.
Oil prices, which had eased after a US-Iran memorandum aimed at reducing tensions last month, have now climbed about 9 percent above pre-conflict levels.
Analysts expect oil prices to remain elevated in the coming weeks due to geopolitical uncertainty, although they believe another major price spike is unlikely because of weak global demand and increased oil supplies.
The renewed Middle East tensions also weighed on financial markets, with Japan’s Nikkei 225 and South Korea’s Kospi posting sharp losses during Monday’s trading session.
