Key facts
- Oil prices surged over 2.5% on Monday due to renewed conflict between the U.S. and Iran.
- Brent crude futures settled at $90.49 a barrel, and U.S. West Texas Intermediate crude settled at $85.76.
- The U.S. launched strikes against Iran following attacks on commercial vessels in the Strait of Hormuz.
- The U.S. revoked a waiver on sanctions on Iranian oil, impacting future transactions.
- Analysts expect oil prices to remain elevated due to persistent hazardous conditions in the strait.
Oil prices surged more than 2.5% on Monday, with Brent crude futures settling at $90.49 a barrel and U.S. West Texas Intermediate crude at $85.76. This rise was driven by renewed military actions between the United States and Iran, which have heightened concerns over global energy supply.
The escalation followed U.S. strikes against Iran and the revocation of a temporary waiver on sanctions related to Iranian oil. These actions came in response to attacks on three commercial vessels in the Strait of Hormuz, for which U.S., Qatari, and Saudi officials have blamed Iran.
US Central Command announced it had initiated strikes to impose significant costs on Iran for targeting commercial shipping. In response, Iranian Deputy Foreign Minister Kazem Gharibabadi warned that Tehran would take "decisive actions" to protect its interests and security, calling the waiver revocation a "blatant violation."
The U.S. Department of the Treasury officially rescinded its 60-day waiver on Iranian oil sanctions, meaning transactions are no longer permitted after July 17. This move also cancels authorization for any new transactions.
Analysts suggest that the ongoing hazardous conditions in the Strait of Hormuz and the winding down of emergency oil stockpile releases will likely keep oil prices elevated. Some predict that passage through the strait could remain below pre-war levels for an extended period, with potential for periodic flare-ups in hostilities.