(RTTNews) - Rebounding from last Friday's slide, crude oil prices have soared on Monday as the U.S. recommenced attacks on Iran yesterday after a month-long pause, which was followed by Iran's retaliatory strikes, stoking concerns of a broader re-escalation in the gulf.
WTI Crude Oil for October month delivery was last seen trading up by $2.24 (or 2.69%) at $85.64 per barrel. The U.S.-Iran war is in its seventh month. For over a month's time, both nations refrained from any military maneuvers. However, late on August 30, U.
S. Central Command struck positions belonging to Iran's Islamic Revolutionary Guards Corps on Larak Island in the Strait of Hormuz. U.S. Central Command announced that it conducted this preemptive operation to intercept and destroy two Iranian missiles that were ready to deploy sea-mines in the Strait of Hormuz.
In retaliation, Iranian forces conducted strikes on the U.S. bases in Jordan, and later, in the United Arab Emirates. Claiming that all missiles except one were intercepted by the American air defense systems, in an interview with Fox News, U.S. President Donald Trump stated that the U.
S. will hit Iran back hard. At the same time, Trump also remarked that Iranians desperately want a meeting with the U.S. but expressed doubts if they can be counted to make a deal. Through Truth Social, Trump posted an AI-generated image apparently depicting the bombing of Iran's Kharg Island.
While Iran claimed to have reached an understanding with Oman to manage the shipping traffic across the Strait of Hormuz and share the revenues, Trump reiterated his claim that U.S. forces are in full control over the strait. The United Kingdom Maritime Trade Operations agency reported that a vessel transiting around 12 nautical miles north of Khasab, Oman was struck by an unknown projectile.
According to Windward, as of Saturday, merely seven vessels (five inbound and two outbound) attempted to transit the Strait of Hormuz. Following the contradictory claims and counter-claims by both nations over the authority and control of the management of Strait of Hormuz, uncertainty persists over a resumption of normal shipping traffic, and supply disruption concerns loom large among traders and consequential oil-linked inflation threats have increased.
Recently, the Organization of Petroleum Exporting Countries and the International Energy Agency offered diverse outlooks on global demand growth for 2026. While OPEC expected modest growth, the IEA predicted a substantial contraction based on increased oil prices and persisting supply disruptions.
The attention of investors was also drawn to the speech by U.S. Federal Reserve Chairman Kevin Warsh last Friday in Wyoming. Speaking at the Jackson Hole symposium, Warsh leaned more to bring back inflation back to the target of the central bank, triggering expectations of an interest rate hike.
According to the Automobile Association of America, the average price of gasoline in the U.S. hovered around $4.09 per gallon on Friday. Last Friday, Trump announced securing Venezuelan oil under a new arrangement that gives the U.S. control of 65 billion barrels of the nation's oil, which would be used to replenish the U.
S. reserves. According to energy experts, actual production could take several months and need billions of dollars in investment. Of note, with an estimated 303 billion barrels of crude oil in the ground, Venezuela's reserves equal around 17% of the world's supply, according to the U.
S. Energy Information Administration. Traders are of the view that while further attacks on vessels, oil terminals, and export infrastructure in the Middle East could add to the geopolitical premium for crude oil, higher OPEC+ output, weakening Chinese demand, and a stronger U.
S. dollar could exert downside pressure on oil prices.