The price of oil jumped more than 3% on Monday as renewed military strikes between the United States and Iran raised fresh concerns about the movement of energy supplies through the Strait of Hormuz, a major route for global oil and gas shipments.
Brent crude futures gained $2.39, or 3.14%, to $78.40 at 1321 GMT. U.S. West Texas Intermediate crude rose $2.17, or 3.04%, to $73.58 a barrel. Both contracts had climbed more than 4% earlier in the session.
During peacetime, around 20% of the world’s oil and gas is transported through the Strait of Hormuz, making disruptions to shipping a key concern for energy markets.
“The focus will remain on the number of inbound tankers as a lower number could impact production, so currently we see a risk premium and a disruption risk supporting prices,” UBS analyst Giovanni Staunovo said.
US Central Command (CENTCOM) said it completed a wave of strikes against dozens of targets in Iran using precision munitions. The military said the operation was intended to limit Tehran’s ability to carry out attacks in the Strait of Hormuz.
CENTCOM said the targets included Iranian air defense and coastal radar systems, missile and drone sites, and small boats.
“The Strait of Hormuz is a vital maritime corridor for global trade. Iran does not control it,” CENTCOM said.
Iran, however, maintains that it exercises full control over the Strait of Hormuz. Tehran claims the waterway is Iranian sovereign territory and says foreign commercial and military vessels must obtain explicit permission and authorization from the Islamic Revolutionary Guard Corps before passing through it.
