- Oil prices rose over 5% to above $100 per barrel amid Strait of Hormuz tensions
- Brent crude hit $113.69 and WTI reached $107.04 after missile incident reports
- Iran claimed US warship was struck near Jask; US officials denied the strike
Oil prices surged about 5% on Monday, climbing above the $100-per-barrel mark as tensions around the Strait of Hormuz intensified following reports of a missile incident involving a US warship, Reuters reported.
Brent crude futures rose $5.52, or 5.1%, to $113.69 a barrel, while US West Texas Intermediate (WTI) gained $5.10, or 5%, to $107.04 a barrel. Both benchmarks rebounded sharply after losses in the previous session.
The rally was triggered after Iran's Fars news agency reported that a US warship was hit by two missiles near Jask after allegedly ignoring Iranian warnings while attempting to transit the Strait. Iran's navy also claimed it had blocked US warships from entering the area.
Axios, citing a senior US official, said the claim of a strike on a US vessel was denied.
ALSO READ:
Despite the lack of confirmation, markets reacted strongly to the risk of further disruption in the Strait of Hormuz, a critical artery for global oil supplies.
“The path for prices remains skewed to the upside as long as flows through the Strait remain restricted,” UBS analyst Giovanni Staunovo said.
US President Donald Trump said Washington would begin operations to assist ships stranded in the Strait, even as no breakthrough in easing tensions appears imminent.
Iran, meanwhile, warned US forces against entering the region, saying it would “respond harshly” to any perceived threat.
The geopolitical backdrop remains fragile, with Tehran reviewing Washington's response to its 14-point proposal and insisting that nuclear talks be delayed until shipping blockades are lifted.
Adding to supply concerns, the United Kingdom Maritime Trade Operations (UKMTO) agency reported that a tanker was struck by unidentified projectiles near Fujairah in the United Arab Emirates.
On the supply side, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed to raise output targets by 188,000 barrels per day in June for seven member countries, marking the third consecutive monthly increase. However, analysts caution that much of the additional supply may not materialise as long as disruptions in the Gulf persist.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.