Oil prices soar as attacks spread across Gulf energy routes

Crude oil prices traded near $90 per barrel on Monday, extending their rally as the conflict between the United States and Iran widened across the Gulf, disrupting shipping through the Strait of Hormuz, threatening key oil export infrastructure and heightening fears of a broader supply shock.

Data from Oilprice showed Brent crude rose 1.46 percent to $89.39 per barrel, while West Texas Intermediate (WTI) gained 1.30 percent to $82.84 per barrel, lifting both benchmarks to their highest levels since June 10.

The latest gains followed a ninth consecutive day of US air strikes on Iranian military targets, with Washington saying the campaign was aimed at degrading Tehran’s ability to threaten commercial shipping through the Strait of Hormuz, the world’s most important oil transit chokepoint.

Brent has gained more than $10 per barrel in recent trading sessions as geopolitical tensions intensified, reflecting a growing risk premium amid fading hopes of a diplomatic breakthrough.

The Strait of Hormuz carries about 20 percent of global oil consumption and a significant share of the world’s liquefied natural gas (LNG) exports, making any prolonged disruption to traffic through the waterway a major concern for global energy markets.

Tanker traffic slows to two-month low

The security situation deteriorated further on Monday after an empty Malta-flagged, Greece-managed oil products tanker, Kavomaleas, halted at anchor near Oman’s Musandam Peninsula as shipowners grew increasingly reluctant to transit the Strait in either direction.

Shipping data showed the tanker, which had been chartered to load petroleum products from inside the Gulf, anchored after entering the region. Its Automatic Identification System (AIS) signal disappeared while transiting into the Gulf, suggesting it switched off its transponder as a security precaution.

The incident highlights a growing trend among commercial vessels navigating the Strait in “dark mode” by disabling tracking systems to reduce the risk of detection.

Industry sources say tanker operators have largely suspended attempts to transit the Strait since hostilities resumed more than a week ago, following renewed Iranian attacks and harassment of commercial vessels.

Late last week, Iran’s Islamic Revolutionary Guard Corps (IRGC) Navy said it intercepted four vessels attempting to pass through the Strait after switching off their transponders, claiming two of the ships were forced to stop after being involved in incidents.

The disruption has pushed tanker movements through Hormuz to their lowest level in two months, fuelling fresh concerns over crude supply shortages during the peak summer demand season.

Further heightening market anxiety, the United Kingdom Maritime Trade Operations (UKMTO) reported that a vessel caught fire about eight nautical miles northwest of Kumzar, Oman, although the cause has yet to be determined. UKMTO advised ships transiting the area to exercise caution while investigations continue.

Drone strike hits major Black Sea oil export route

Supply concerns were compounded after a drone struck the tanker NELSA while it was loading crude oil at the Caspian Pipeline Consortium’s (CPC) Black Sea export terminal, forcing the suspension of exports for the second time in less than 24 hours.

The attack occurred while the vessel was loading at Single Point Mooring 1 (SPM-1), igniting a fire on deck and in compartments near the engine room.

Emergency crews extinguished the fire within hours, with no oil spill reported, but loading operations were suspended and no timetable has been announced for their resumption.

The latest strike followed another drone attack on Sunday that also forced CPC to halt crude loadings before operations resumed later that evening.

The 1,511-kilometre CPC pipeline, which transports more than two-thirds of Kazakhstan’s crude exports alongside oil from Russia’s Caspian fields, accounts for roughly one percent of global oil supply.

Its shareholders include Chevron, ExxonMobil, Shell, Eni, Lukoil, Rosneft and KazMunayGas, making it one of the world’s most strategically important internationally owned crude export systems.

Conflict expands across the Gulf

The conflict broadened further on Monday as air raid sirens sounded across Bahrain and other Gulf states, reflecting growing fears that the confrontation could spread well beyond the Strait of Hormuz.

The escalation followed the announcement of the deaths of three US service members, with US military officials also examining unidentified remains that could belong to a fourth soldier previously reported missing during operations in Jordan.

US Central Command (CENTCOM) said its latest wave of strikes targeted Iranian coastal surveillance systems, military logistics facilities and maritime capabilities in an effort to weaken Tehran’s ability to threaten shipping through Hormuz.

President Donald Trump said the latest attacks were carried out in honour of the US personnel killed in recent days.

“We hit them very hard again tonight,” Trump told reporters aboard Air Force One, describing the strikes as a response to attacks on American forces.

The latest military campaign follows reports that Iranian ballistic missiles targeted US military facilities in Jordan, Kuwait and Syria, including assets at Muwaffaq Salti Air Base in Jordan, which has served as a launch point for US operations against Iran.

Bahrain’s Interior Ministry confirmed that air raid sirens were activated across the island kingdom, home to the US Fifth Fleet, which has also come under threat during the current crisis.

The widening geographic scope of the conflict has increased concerns that attacks could spread to additional energy infrastructure and military installations across the Gulf region.

Markets brace for supply tightening

Analysts said simultaneous disruptions in the Strait of Hormuz, the Black Sea export corridor and growing instability across the Gulf are reinforcing expectations of tighter global crude supplies.

The Brent futures curve remains firmly in backwardation, indicating strong demand for immediate crude deliveries and expectations that supply will remain constrained in the near term.

For Nigeria, Africa’s largest crude producer, the rally presents a significant fiscal windfall. Brent trading close to $90 per barrel remains well above the Federal Government’s 2026 budget benchmark of $64.85 per barrel, boosting crude export earnings, government revenues and foreign exchange inflows.

Higher prices could also strengthen Nigeria’s external reserves and improve fiscal buffers, although economists warned that sustained oil price increases could raise global fuel costs, increase transportation expenses and reignite inflationary pressures, particularly in oil-importing economies.

Despite the military escalation, Iran indicated that diplomatic contacts with Washington have not completely broken down. Foreign Ministry spokesman Esmaeil Baghaei said indirect exchanges between both sides have continued through mediators in recent days, although he provided no details.