Oil Prices Rise 2.5% As US-Iran Escalation Raises Fresh Strait Of Hormuz Supply Fears

Oil prices climbed in early Asian trading on Monday after fresh military exchanges between the US and Iran heightened concerns about crude supplies through the Strait of Hormuz.

WTI front-month futures rose 2.47% to $85.46 a barrel, while Brent gained 2.71% to $90.49. The increase followed a US strike on two Iranian rocket launchers on Larak Island, located within the strategically important Strait of Hormuz.

US-Iran Escalation Raises Hormuz Risks

The US Central Command said the strike targeted Iranian Revolutionary Guard forces that were preparing to launch rockets and deploy sea mines in the waterway.

The latest action came shortly after US President Donald Trump said Washington had completed mine-clearing operations in the Strait and warned against further attempts to obstruct shipping.

Iran responded by launching ballistic missiles and drones towards US military facilities in Jordan. Jordanian authorities said their air defences intercepted eight missiles that entered the country's airspace.

Iran's Revolutionary Guard subsequently said it had targeted infrastructure and aircraft positions at two US bases in Jordan.

The developments have revived concerns about whether the latest confrontation will remain limited or trigger a broader disruption to Gulf energy exports.

Shipping Disruptions Keep Oil Market on Edge

Brent's return above $90 a barrel marks a significant move, although prices remain below levels reached during earlier stages of the conflict. Both benchmarks had fallen more than 4% last week.

Meanwhile, commercial shipping through the Strait of Hormuz remains substantially below pre-war levels. Vessel traffic reportedly fell to around five ships a day over the weekend, while a maritime warning said another tanker had been hit by an unidentified projectile.

The US has also continued its blockade of Iranian ports, with 83 commercial vessels reportedly redirected and several others disabled or boarded as of August 30.

With shipping disruptions, attacks on vessels, the blockade and renewed concerns over mine deployment, traders are likely to closely monitor crude flows through Hormuz for signs of a wider supply shock.