Oil prices surge over 5% on Monday

Global oil prices surged more than 5 per cent on Monday as tensions between the United States and Iran escalated, raising fears that a fragile ceasefire could collapse following the US seizure of an Iranian cargo ship and continued disruption in the Strait of Hormuz.

Brent crude rose $5.08 to $95.46 a barrel, while US West Texas Intermediate gained $5.01 to $88.86. The rebound follows a sharp 9 per cent drop on Friday after Tehran signalled the strait would remain open during the truce.

Market concerns quickly returned after reports of attacks on tankers and warnings that up to 11 million barrels per day of crude supply remains offline. Shipping activity through the strait remains limited despite a brief uptick, with more than 20 vessels crossing on Saturday.

The US blockade of Iranian ports and Tehran’s fluctuating stance on access to the strait have heightened uncertainty. Iran also signalled it would skip a planned new round of talks, further clouding prospects for stability and a swift recovery in global oil flows.

Attribution: Reuters