International crude oil prices jumped more than $1 a barrel on Monday after the U.S. attacked an Iranian island in the Strait of Hormuz and drew retaliation from Tehran, as conflict in the Middle East extended into its sixth month. Brent crude futures climbed $1.08, or 1.23%, to $89.18 per barrel while U.S. West Texas Intermediate crude was at $84.32, up 92 cents, or 1.10%.
U.S. forces struck two launchers on Iran's Larak island in the Hormuz strait on Sunday, the first known American strikes on the Gulf nation since late July. Negotiations to end the conflict are at an impasse while mediators work to reopen the Strait of Hormuz, through which a fifth of the world's oil flowed before the war began at the end of February. Brent and WTI are set to post small declines in August after falling more than 4% last week, in what was their first weekly decline in three.
While the path to a deal to reopen the strait is elusive, increases in oil flows through the Hormuz strait kept concern over supply disruption in check, analysts told news agency Reuters. The number of visible commodity vessels that sailed through the Strait of Hormuz over the weekend dropped to five a day, shipping data showed on Monday, reflecting caution among companies wary of attacks on ships.
The United Kingdom Maritime Trade Operations reported on Sunday that a tanker was struck by a projectile while sailing inbound through the strait on Saturday. U.S. President Donald Trump said on Sunday that oil from a recently struck deal with Venezuela will be used to replenish the U.S. Strategic Petroleum Reserve which has dropped near its lowest level in 44 years.
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