Oil prices rose sharply on Monday as tensions between the United States and Iran disrupted tanker movement through the Strait of Hormuz, a key global oil transit route. Benchmark West Texas Intermediate (WTI) crude climbed 5.6% to $87.20 per barrel, while Brent crude gained 5.3% to $95.16 per barrel.
The surge followed renewed uncertainty after Iran reversed its decision to reopen the strait, while Donald Trump said a US naval blockade of Iranian ports would remain in place.
Global Markets React
European markets declined amid the geopolitical uncertainty.
- FTSE 100 fell 0.4%
- CAC 40 dropped 1.1%
- DAX declined 1.3%
- FTSE MIB slipped 1.2%
In contrast, Asian markets posted gains.
- Nikkei 225 rose 1%
- Kospi gained 1.1%
- Hang Seng Index added 0.8%
- Shanghai Composite Index advanced 0.6%
Renewed Uncertainty
The latest developments reversed gains seen late last week, when oil prices had fallen after Iran signaled the strait was open for commercial shipping.
Iranian Foreign Minister Abbas Araghchi had earlier indicated that tanker traffic could resume, easing supply concerns. However, the US maintained its naval blockade, adding to uncertainty over global oil flows.
The standoff comes as a fragile ceasefire between the US and Iran approaches its expiry, raising concerns about further disruptions in energy supply.
Market Outlook
Analysts said volatility is likely to continue as markets react to geopolitical developments.
Oil prices remain highly sensitive to any disruption in the Strait of Hormuz, through which a significant portion of the world’s oil supply passes.
