Oil prices rose as attacks threatened energy shipments through the Strait of Hormuz
Traffic in the Strait of Hormuz has been at a low level for weeks due to renewed clashes. Iran expanded its attacks on Gulf states following US strikes and declared the Strait of Hormuz closed. Oil prices rose more than 3% on Monday after the reciprocal military attacks reignited concerns about energy shipments through the Strait of Hormuz.
Brent crude futures rose $2.67, or 3.51%, to $78.68 at 07:43 GMT, while WTI crude rose $2.48, or 3.47%, to $73.89 a barrel.
Ship traffic in the Strait of Hormuz slowed as security concerns increased.
New attacks by the US and Iran over the weekend fueled fears of a renewed escalation of tensions. Tehran targeted US facilities in the Gulf on Sunday and announced it was closing the Strait of Hormuz again. The Iranian Revolutionary Guard said on Monday that it had attacked US military bases in Kuwait and Bahrain.
According to data, ship traffic through the Strait fell to its lowest level in five weeks on Sunday. Six ships reportedly passed through the Strait on Sunday.
The escalating attacks have cast doubt on the future of the interim US-Iran agreement signed last month, which aimed to reopen the Strait and end the war after 60 days of additional negotiations.
According to the International Energy Agency's (IEA) monthly report released Friday, global oil supply increased by 4.1 million barrels per day in June following the agreement, but remained 9.4 million barrels below pre-war levels.
Despite Iran's announcement that it was closing the Strait, Trump said the Strait of Hormuz remains open to commercial traffic.
Iranian oil supplies held at sea are increasing following Tehran's increased exports during the interim peace agreement with the US. However, sales have slowed as China’s independent refineries have turned to cheaper crude oil from Iraq, the UAE, and Qatar.
UAE’s ADNOC company lowered its August selling price for Murban crude oil. Abu Dhabi National Oil Company announced on Monday that it has set the official August selling price for benchmark Murban crude oil at $80.01 per barrel, up from $101.48 per barrel the previous month.
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