Oil nears $97 as US-Iran tensions intensify

Oil prices continued to climb on Monday as renewed military strikes between the United States and Iran raised fears that disruptions to Middle East energy supplies could last for months.

Brent crude futures rose 52 cents, or 0.54%, to $96.80 a barrel by 2354 GMT. US West Texas Intermediate (WTI) crude also gained 66 cents, or 0.72%, to reach $92.14 a barrel.

The latest gains follow a sharp rally last week. Brent crude jumped 7.8%, while WTI advanced almost 10% as the conflict affected oil shipments through the Strait of Hormuz.

The strategic waterway is vital to global energy markets. Before the conflict, around one-fifth of the world’s oil supply passed through the Strait of Hormuz.

Concerns over maritime security intensified after US forces struck three Iranian oil tankers on Saturday, according to US Central Command. One of the vessels was reportedly targeted near Kharg Island, a major Iranian oil export hub.

Iran’s Islamic Revolutionary Guard Corps Navy also said it had targeted three oil tankers travelling through what it described as unauthorised routes in the Strait of Hormuz. It also reported attacks on three US vessels in other locations.

Maritime intelligence firm Marisks described the latest incidents as a major escalation in the maritime confrontation.

The attacks have increased concerns among shipping companies and energy traders that commercial vessels could increasingly become caught up in the conflict.

Traffic through the Strait has already fallen sharply. Data from analytics firm Kpler showed that an average of only 10 commodity-carrying ships crossed the waterway each day over the previous 10 days.

That was the lowest level recorded since May, highlighting the growing impact of the conflict on regional shipping.

Iran has also indicated that further restrictions could be imposed around the strategic waterway. Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, said a restricted zone would be announced outside the Strait of Hormuz in the coming days, according to Iranian state media.

The developments have added further uncertainty to the global oil market.

Meanwhile, OPEC+ decided on Sunday to keep its oil production policy unchanged for October. The group said further decisions on production levels would require agreement on new quotas.

Analysts warned that a prolonged confrontation could prevent Middle Eastern oil supplies from returning to normal quickly.

ANZ analysts said a prolonged standoff involving limited but continuing military action by Washington and Tehran appeared to be the most likely scenario.

They expect regional oil exports to remain under pressure for the rest of 2026, followed by a gradual reopening towards the end of the fourth quarter.

A full return to pre-conflict oil flows may take even longer. The analysts do not expect Middle Eastern supply to return to pre-war levels until late in the first quarter or early in the second quarter of 2027.