Oil shock rattles Asia as US-Iran attacks send Gulf crude prices soaring.
Oil prices surged in early Asian trading on Monday after the United States struck two Iranian launchers on Larak Island near the Strait of Hormuz. Iran subsequently launched missiles at US military targets in Jordan, escalating fears of a broader conflict and renewed disruption to crude shipments through the strategic waterway.
At about 9:20am Tokyo time, the OilPrice market dashboard showed the following benchmark prices:
Benchmark Price Change
- WTI crude: $84.57 a barrel, up $1.17, or 1.40%
- Brent crude: $89.45 a barrel, up $1.35, or 1.53%
Hormuz risk drives rally
Murban crude rose to $95.75 a barrel, gaining $3.72, or 4.04%.
Brent had earlier climbed above the psychologically important $90-a-barrel threshold, reaching $90.32, while US West Texas Intermediate rose to $85.41, according to Reuters data at 7:02am Tokyo time.
The rally was driven by renewed concerns over the security of the Strait of Hormuz after the US military said it had struck two Iranian launchers on Larak Island. US Central Command said the launchers were allegedly being prepared to fire rockets carrying sea mines into the strategic waterway.
The attack marked the first known US strike on Iran since late July, raising concerns that Tehran could retaliate against American military assets, commercial vessels or energy infrastructure.
Although the Strait of Hormuz has not been formally closed, shipping activity has fallen sharply as operators weigh the heightened security risks. Visible commodity-vessel transits dropped to around five a day over the weekend, although the actual number may be higher because some vessels have switched off their tracking systems.
The key market concern is therefore not just whether Iran formally blocks the waterway, but whether insurers, tanker operators and energy companies consider the route too risky to use.
Even a partial slowdown in shipping could tighten supplies, increase freight costs and push up crude, fuel and petroleum-product prices across Asia. The renewed tensions have already driven oil prices higher in early Asian trading.
Murban leads regional gains
Murban crude, the UAE’s flagship export grade, recorded the strongest gain among the benchmarks, rising more than 4%. Its sharper increase compared with Brent and WTI highlights the market’s heightened sensitivity to Gulf supply and shipping risks.
The divergence also suggests that traders are placing a higher premium on Middle East-linked crude amid growing concerns over regional supply disruptions.
Gulf producers rely heavily on maritime routes to move crude and other energy products to international markets. Any further escalation around the Strait of Hormuz could therefore affect crude exports, refined products and LNG shipments, adding further upward pressure to regional energy prices.
Despite the latest spike, oil prices remain well below the extreme levels that would typically signal a complete disruption to global supplies.
Traders are now closely watching whether the US strike triggers further military action or remains an isolated operation. Any escalation could add fresh pressure to crude prices, particularly given the strategic importance of the Strait of Hormuz.
Oil markets have also remained highly volatile throughout August. Brent futures have moved across a range of roughly $17 a barrel as traders responded to changing expectations over the US-Iran conflict, potential supply disruptions and diplomatic efforts.
The risk is that a prolonged disruption in the Gulf could eventually affect LNG shipments as well as oil flows. With maritime traffic through the Strait of Hormuz already well below normal levels, further attacks or heightened security concerns could discourage more vessel operators from using the route.
Few oil and LNG vessels are currently willing to take the risk, leaving energy markets vulnerable to another sharp price move if the attacks escalate.
Market prices shown are from the supplied dashboard at approximately 9:20am Tokyo time. Prices may vary depending on the contract, exchange and data provider.
