Oil Prices Surge on Escalating Mideast Conflict

Oil prices surged by 3% on Monday, with Brent crude futures climbing past $90 a barrel for the first time since June 11. This increase follows a substantial 15.9% gain last week. U.S. West Texas Intermediate crude also experienced a notable rise, reaching its highest point since June 12 after a 15.5% weekly ascent.

The heightened tensions stem from an escalation of conflict in the Middle East over the weekend. The United States conducted its ninth consecutive night of attacks against Iran, while Kuwait and Bahrain reported additional Iranian strikes. Both sides have targeted shipping traffic, with the U.S. enforcing a naval blockade on Iranian ports and Iran claiming to target vessels violating navigation rules in the Strait of Hormuz.

This critical waterway, which normally facilitates one-fifth of global oil trade, saw a significant reduction in vessel traffic. Data indicated that only four vessels transited the strait on Sunday, a decrease from eight the previous day. Concerns are mounting over the potential impact on oil inventories, which are currently at their tightest in five years.