Oil prices rise on Monday

Oil prices rose more than 2 per cent on Monday after US forces struck Iran’s Larak Island in the Strait of Hormuz, prompting retaliation from Tehran and raising concerns over the conflict’s impact on shipping through the key oil route.

Brent crude futures gained $2.21, or 2.51 per cent, to $90.31 a barrel, while US West Texas Intermediate (WTI) crude rose $1.83, or 2.19 per cent, to $85.23 as of 0436 GMT.

The strikes on Sunday were the first known US attacks on Iran since late July. Iran subsequently attacked two US air bases in Jordan, according to Iranian media citing the Revolutionary Guards.

Negotiations to end the conflict remain stalled as mediators seek to reopen the Strait of Hormuz, through which about a fifth of global oil supplies flowed before the war began in late February. Visible commodity vessel traffic through the strait fell to five ships a day over the weekend, while a tanker was reportedly hit by a projectile on Saturday.

Analysts expect oil prices to remain in the $85-$95 a barrel range unless there is greater clarity over the situation in the strait.

Attribution: Reuters