By: Economy Middle East

Oil prices surged more than 4 percent on Monday after renewed military strikes between the United States and Iran heightened fears of supply disruptions through the Strait of Hormuz, one of the world’s most critical energy shipping routes.

Brent crude futures rose $3.26, or 4.30 percent, to $79.28 per barrel by 9:19 UAE time, while U.S. West Texas Intermediate (WTI) crude gained $3,09, or 4.33 percent, to $74.50 per barrel.

The sharp gains reflect growing concerns that escalating geopolitical tensions could threaten global oil and liquefied natural gas (LNG) supplies.

U.S.-Iran conflict intensifies

The latest rally followed another round of military action in the Middle East.

According to the U.S. Central Command, American forces carried out a new wave of precision strikes against dozens of targets across multiple locations in Iran on Sunday.

Iran responded on Monday by announcing attacks on U.S. military bases in Kuwait and Bahrain, raising fears of a broader regional escalation.

The renewed hostilities have increased uncertainty surrounding energy markets and global trade routes.

Strait of Hormuz remains in focus

The Strait of Hormuz continues to be the central concern for oil markets.

Although U.S. President Donald Trump said on Sunday that the waterway remains open to commercial shipping, Iran had earlier declared that it had closed the strait after a vessel reportedly traveled along an unauthorized route and was struck.

Before the conflict began at the end of February, approximately 20 percent of global oil and LNG supplies passed through the Strait of Hormuz.

Ship-tracking data from Kpler showed that only six vessels transited the strait on Sunday, marking the lowest daily traffic level in five weeks.

The slowdown has intensified concerns over potential supply bottlenecks and higher energy prices.

Oil supply outlook remains uncertain

The renewed military escalation has also cast doubt over the future of the interim U.S.-Iran agreement reached last month.

The agreement had aimed to reopen the Strait of Hormuz and pave the way for ending the conflict after an additional 60 days of negotiations.

Despite improving supply conditions following the agreement, the International Energy Agency (IEA) said in its latest monthly report that global oil supply increased by 4.1 million barrels per day (bpd) in June but remained 9.4 million bpd below pre-war levels.

The agency warned that continued geopolitical instability could quickly reverse recent supply gains.

Energy markets monitor geopolitical risks

Oil traders remain focused on developments in the Middle East as military tensions continue to influence market sentiment.

Any prolonged disruption to shipping through the Strait of Hormuz could tighten global crude supplies and add further upward pressure on prices, particularly as the route remains one of the world’s most important energy transit corridors.

Markets will continue to monitor diplomatic developments and shipping activity for signs of whether supply risks ease or intensify in the coming days.