Oil prices climbed by more than 3% on Monday 13 July following renewed military exchanges between the US and Iran, prompting concerns over the security of global energy shipments through the Strait of Hormuz.
By 07:43 GMT, Brent crude futures had increased by $2.67, or 3.51%, reaching $78.68 a barrel (bbl), reported Reuters.
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Meanwhile, US West Texas Intermediate (WTI) crude had risen by $2.48, or 3.47%, to $73.89/bbl.
Over the weekend, both US and Iranian forces carried out strikes in the Gulf region.
Iran stated that its Revolutionary Guards had launched attacks on US military bases in Kuwait and Bahrain and claimed once again to have closed the Strait of Hormuz.
The strait is a central route for oil and liquefied natural gas (LNG), handling around a fifth of the world’s daily supply before the current conflict began in late February.
The recent surge in violence follows an interim agreement signed last month between the US and Iran, which set the goal of reopening the strait and ending the ongoing war within a 60-day negotiating period, reported Reuters.
The escalation of military action, which saw Tehran also target assets in Qatar and the United Arab Emirates (UAE), has placed the future of this agreement in doubt.
US President Donald Trump, speaking on NBC’s Meet the Press on Sunday, said that the strait is open to commercial traffic, reported Reuters.
This statement came after Iran’s declaration of a closure, citing an incident involving a vessel allegedly taking an unauthorised route.
Shipping data from Kpler reported that just six vessels passed through the strait on Sunday 12 July, marking a five-week low in vessel traffic.
Meanwhile, Iranian oil shipments held at sea have risen, although sales are reportedly slow, with Chinese buyers turning to cheaper crude from Iraq, the UAE and Qatar.
According to the International Energy Agency, global oil supply in June rose by 4.1 million barrels per day (mbbl/d) after the interim deal but remained 9.4mbbl/d below levels prior to the conflict.
Meanwhile, ADNOC announced its August official selling price for Murban crude at $80.01/bbl, down from $101.48/bbl the previous month.
