Crude oil prices continued their rally on Monday after a flare-up between Iran and the United States made the prospect of peace and a secure Strait of Hormuz more distant.
Futures of global benchmark brent crude jumped nearly 4% to $91.3 per barrel as of 3:07 p.m. IST. West Texas Intermediate also rose nearly 4%, and traded around $86 per barrel levels.
The surged came on the back of renewed hostilities between Tehran and Washington, and America's strike on an Iranian island in the Strait of Hormuz. The attack drew retaliation from Tehran, as conflict in the Middle East stretched into its sixth month.
US 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.
“I can confirm that earlier today US forces struck two Iranian launchers on Larak Island. Islamic Revolutionary Guard Corps forces were observed preparing to launch rockets with sea mines into the Strait of Hormuz,” Navy Capt. Tim Hawkins, a United States Central Command spokesperson said in a statement.
Iran's Islamic Revolutionary Guard Corps said that it struck US bases in Jordan and US military targets at the Al Minhad airbase in the UAE in response to the Larak attacks. Though, UAE's Defence Ministry rejected Iranian claims that al-Minhad Air Base was targeted.
Iranian President Masoud Pezeshkian said that the country does not seek war, but will not standby in the face of aggression after the strikes on Larak.
"We are capable of delivering a decisive response. Instability in this region would affect everyone and create serious problems," he added.
Negotiations to end the conflict are at a deadlock 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. Meanwhile, inflation has eaten its way into Tehran with civilians feeling the pangs of the conflict.
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