Oil Climbs 2% as US Strikes on Iran’s Larak Island Escalate Middle East Tensions

Oil markets rallied more than 2 % on Monday after a fresh round of hostilities between the United States and Iran. Brent crude climbed $1.86 to $89.96 a barrel, while West Texas Intermediate (WTI) rose $1.60 to $85.00 a barrel. The jump follows a week‑long decline of over 4 % for global benchmarks, the first weekly drop in three weeks.

The price surge comes as U.S. forces struck two missile launchers on Iran’s Larak Island in the Strait of Hormuz on Sunday, marking the first U.S. strike on Iranian territory since late July. In retaliation, Iran’s Revolutionary Guards reportedly fired ballistic missiles at two U.S. air bases in Jordan. Jordanian air defenses intercepted eight of the missiles, and Iranian state television aired footage of the launch.

The conflict, now in its sixth month, has stalled diplomatic talks and prompted mediators to work on reopening the Strait of Hormuz, a critical chokepoint that channels about one‑fifth of global oil supply. Shipping data from the weekend showed only five visible commodity vessels traversing the strait per day, reflecting heightened caution among shipping companies.

The United Kingdom’s Maritime Trade Operations reported that a tanker was struck by a projectile while inbound through the strait on Saturday.

President Trump’s administration has shifted focus toward economic pressure rather than further military action, threatening to sanction countries and entities that continue business with Tehran. On August 1, Trump said he would pause new strikes at the urging of Gulf allies Qatar, Saudi Arabia and the United Arab Emirates. The last confirmed U.S. military strike on Iran occurred on July 29, targeting dozens of Revolutionary Guard sites.

Iran’s Revolutionary Guard condemned the U.S. attack as a “fatal mistake” by the Trump regime, warning that the enemy would face both military and economic repercussions.

The U.S. move toward sanctions comes amid concerns that prolonged conflict could deplete munitions stockpiles and weaken readiness elsewhere. As tensions flare, market participants remain on edge, watching for any further escalation that could disrupt the already fragile supply chain.