Brent crude futures rose above $90 a barrel on Monday, the highest since June, as escalating hostilities between the United States and Iran placed new restrictions on oil shipments through the Strait of Hormuz. In its reports, Dawn noted that Brent had climbed $2.09, or 2.37 percent, to $90.19 a barrel by early trade, after a 15.9 percent gain in the previous week, its largest weekly increase since April. US West Texas Intermediate crude stood at $84.20 a barrel, up $1.71, or 2.07 percent, the highest since June 12.

Coverage comparison

Dawn, covering the market and geopolitical developments over two consecutive trading days, reported that the rally on Monday extended a series of gains driven by US–Iran hostilities in the Middle East. Within those reports, Dawn described the US military as having conducted a ninth straight night of attacks against Iran, while allies Kuwait and Bahrain reported more Iranian strikes. The following Wednesday, oil prices pulled back slightly but still gained over 2 percent after the US military announced a new round of airstrikes and reimposed crude sales sanctions on Iran, raising supply concerns. The latter report also noted that both benchmarks had risen by around 3 percent a day earlier when Washington revoked a general licence that had permitted Iranian crude sales.

Dawn's reports are the only coverage available for this story; the information below comes exclusively from those dispatches.

Key claims

  • Brent crude futures rose 2 percent to exceed $90 per barrel on Monday.
  • The US–Iranian exchange of strikes has continued, with the US carrying out a ninth straight night of attacks against Iran.
  • Two oil tankers exploded and were immobilised after attempting to transit the Strait of Hormuz, according to Iran's Islamic Revolutionary Guard Corps.
  • The US military launched airstrikes and reimposed crude sales sanctions against Iran, following Iranian attacks on three commercial vessels.
  • Qatar blamed Iran for attacks on vessels, including one on its liquefied natural gas tanker.
  • The US and Iran signed a truce agreement last month, which has appeared increasingly fragile.

Perspectives

Market analysts from ING and MST Marquee emphasized the fragility of supply through the Strait of Hormuz. ING analysts noted that Brent broke above $90 per barrel with no let-up in the escalation, warning of the possibility of a return to wide-scale attacks across the Gulf. Saul Kavonic of MST Marquee added that the current conflict underscores how fragile passage through the Strait still is, and that if tensions persist, supply constraints could push oil prices higher.

Iranian and US officials offered contrasting accounts of the tanker incidents. The Islamic Revolutionary Guard Corps said two oil tankers were struck and immobilised after attempting to transit an unsafe southern route through the Strait, alleging they had been encouraged by the US military to use the passage. US Central Command, for its part, described its airstrikes as a response to Iranian attacks on three commercial vessels that were transiting the strait, and said the US is enforcing a naval blockade on Iranian ports.

Qatar, according to the report, directly blamed Iran for attacks on vessels, including one against its liquefied natural gas tanker, which reported being struck by a drone that caused a fire in its engine room.