Oil prices extended gains on Monday as tit-for-tat strikes by the US and Iran on vessels in the Strait of Hormuz and elsewhere heightened concerns over a prolonged disruption to Middle East supplies. Brent crude futures rose 52 cents, or 0.54%, to $96.80 a barrel by 2354 GMT, while US West Texas Intermediate crude was at $92.14 a barrel, up 66 cents, or 0.72%.
Brent gained 7.8% last week, while WTI rose nearly 10% after the US and Iran resumed attacks, reducing oil flows through the Strait of Hormuz, through which about a fifth of the world's oil supply passed before the conflict. US forces struck three Iranian oil tankers on Saturday, US Central Command said, including one off the coast of Kharg Island, near Iran's key oil export hub. The navy of Iran's Islamic Revolutionary Guard Corps said on Saturday that it had targeted three oil tankers travelling through unauthorised routes in the Strait of Hormuz, as well as three additional US vessels in other areas.
The Saturday attacks represented a major escalation in the maritime conflict, maritime intelligence firm Marisks said. Commercial tankers are now being deliberately used as instruments of reciprocal economic pressure, substantially weakening the previous distinction between military confrontation and commercial shipping, it added. An average of 10 commodity ships transited the Strait of Hormuz each day over the past 10 days, the lowest level since May, according to data from analytics firm Kpler.
A restricted zone will be announced outside the Strait of Hormuz in the coming days, Mohsen Rezaei, secretary of Iran's Supreme National Security Council, said on Sunday, according to state media. OPEC+ kept its oil output policy unchanged for October at a meeting on Sunday, the producer group said in a statement, as it needs to agree on new quotas before deciding its next output steps. A prolonged standoff, punctuated by calibrated military action by the US and Iran, appeared to be the most likely scenario and was likely to delay the path to full recovery of Middle East supply, ANZ analysts said in a note, expecting exports to remain constrained through the rest of 2026.