Brent crude rose above $90 per barrel on Monday as renewed tensions between Iran and the United States heightened concerns over the security of shipping through the strategic Strait of Hormuz.
Brent was trading at $90.53 per barrel by Monday evening, up $2.01, or 2.27 per cent, while US West Texas Intermediate (WTI) gained $1.85, or 2.25 per cent, to $84.25, according to Oilprice.com.
The rally followed a warning from a senior Iranian official that Tehran had shifted from a defensive to an “offensive” posture and could take military action in the Strait of Hormuz if diplomatic efforts with Washington failed.
The official said Iran was prepared to escalate tensions and could launch a “timely and precise” operation against what it described as a US naval blockade.
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The development has raised fresh fears of disruptions to oil and liquefied natural gas shipments through the waterway, which accounts for about one-fifth of global oil and LNG supplies.
Tensions have intensified after negotiations between Iran and the US stalled over the management of the strait and other unresolved issues. Tehran has insisted on conditions before returning to negotiations, while Washington has rejected Iran’s position on control of the waterway.
US President Donald Trump has also issued fresh threats, warning that Washington could take military action against Oman if it obstructed efforts to resolve the crisis.
The renewed confrontation has unsettled oil markets, reversing earlier expectations that tensions would ease. Brent had traded below $80 per barrel earlier this month but has now climbed above $90 as traders price in the growing risk of conflict and supply disruptions through the Strait of Hormuz.
