Oil prices were trading nearly 2% higher on Monday after the US attacked an Iranian island in the Strait of Hormuz and drew retaliation from Tehran.
Brent crude futures climbed $1.77, or 2%, to $89.87 a barrel by 0733 GMT while US West Texas Intermediate crude was at $84.85, up $1.45, or 1.74%, Reuters news agency reported.
The US struck Iranian island of Larak late on Sunday, prompting retaliatory strikes by the Islamic Republic, targeting US bases in UAE and Jordan.
Commenting on the latest figures, head of energy research at DBS Suvro Sarkar said: “”We see more chances of contained confrontation rather than any sustained escalation in the conflict. What continues to be impacted with every flare up are the timelines for Hormuz ‘reopening’.”
“We were earlier hoping that we could be back to deal negotiations for US-Iran by the end of 3Q, but that is looking more unlikely now. Thus, expect oil prices to remain rangebound in the $85-95 per barrel range unless more clarity emerges on the situation in the Strait of Hormuz.”
The number of visible commodity vessels that sailed through the strait over the weekend dropped to five a day, shipping data showed on Monday, reflecting caution among companies wary of attacks on ships.
The United Kingdom Maritime Trade Operations reported on Sunday that a tanker was struck by a projectile while sailing inbound through the strait on Saturday.
Source: Reuters (edited by Al-Manar)