Key facts
- Oil prices rose as fighting between the US and Iran intensified.
- Brent crude rose 3.2% to $90.95 per barrel, and US benchmark crude climbed 2.8% to $84.04 per barrel.
- Tanker traffic through the Strait of Hormuz has nearly ground to a halt.
- Iran has threatened to disrupt oil exports beyond the Strait of Hormuz, potentially impacting the Bab el-Mandeb Strait.
Oil prices rose on Monday morning as fighting between the US and Iran intensified, fuelling concerns over disruptions to energy shipments through the Strait of Hormuz. Brent crude, the international benchmark, rose 3.2% to $90.95 per barrel, while US benchmark crude climbed 2.8% to $84.04 per barrel.
ING commodities strategists Warren Patterson and Ewa Manthey noted that the US and Iran continue to exchange strikes, warning that unchecked escalation could lead to widespread attacks across the Persian Gulf. They added that tanker traffic through the Strait of Hormuz, a crucial waterway for global oil transport, has nearly ground to a halt, adding to pressure on supplies.
Markets were also impacted by the rollout of a powerful Chinese AI model by Moonshot AI, which, along with other AI-related shares, declined on Friday. Jonas Goltermann, chief markets economist at Capital Economics, wrote that the return to war in the Strait of Hormuz may start to weigh more heavily on financial markets, especially if strong tech earnings reports continue to be met with skepticism.