Oil jumps more than 2% after US attack on Iran's Larak island

Oil prices rose more than 2% on Monday, with Brent crude moving back above $90 a barrel, as fresh military escalation between the US and Iran heightened concerns over supplies through the Strait of Hormuz.**According to agency reports,Brent crude futures climbed $2.51, or 2.85%, to $90.61 a barrel as of 0241 GMT, while US West Texas Intermediate (WTI) crude rose $2.13, or 2.55%, to $85.53 a barrel.
The latest rise came after US forces struck two Iranian launchers on Larak Island in the Strait of Hormuz on Sunday. The attack was followed by an Iranian retaliation against two US air bases in Jordan, according to Iranian media citing the Islamic Revolutionary Guard Corps.The developments have raised fears of another escalation in the Middle East conflict, which has now entered its sixth month.“Looks like we are in another escalation phase. How long that lasts is impossible to determine. Could be days, could be weeks,” IG market analyst Tony Sycamore noted.Technical indicators also pointed to the possibility of further gains. Sycamore said a sustained move by WTI above resistance at $85.80-$85.90 a barrel could open the way towards last week’s high of $87.69, followed by July’s $93.50 level.
Strait of Hormuz remains key supply concern
Negotiations aimed at ending the conflict remain stalled, while mediators continue efforts to reopen the Strait of Hormuz, a crucial global energy route through which around one-fifth of the world's oil flowed before the war began in late February.US Treasury Secretary Scott Bessent told Reuters on Sunday that Washington is likely to impose new secondary sanctions on Iran each week, with the objective of cutting the country off entirely from the dollar-based financial system.

The US Treasury Department is likely to unveil weekly new secondary sanctions aimed at increasing economic pressure on Iran, with an initial focus on banks, US Treasury Secretary Scott Bessent told Reuters https://t.co/LD2ozoPqFM

— Reuters (@Reuters) August 31, 2026

Despite Monday’s jump, both Brent and WTI were on track for small monthly declines in August after losing more than 4% last week, their first weekly fall in three weeks, according to agency reports.According to analysts rising oil flows through the Strait of Hormuz had helped keep concerns over major supply disruptions under control. However, shipping data showed that the number of visible commodity vessels passing through the strait over the weekend fell to just five a day, indicating growing caution among shipping companies.The United Kingdom Maritime Trade Operations also reported on Sunday that a tanker was hit by a projectile while sailing inbound through the Strait of Hormuz on Saturday, adding to concerns over the safety of commercial shipping in the vital waterway.

(Business Correspondent)