Oil prices moved higher in Asian trade on Monday following a U.S. military operation against two launchers on Larak Island, close to the Strait of Hormuz, reviving concerns over possible interruptions to seaborne energy flows.
As of 20:07 ET (00:07 GMT), Brent Oil Futures for November delivery had risen 1.7% to $89.62 per barrel, while West Texas Intermediate crude futures gained 1.6% to $84.69 per barrel.
Market reaction
The price gains occurred after news of the U.S. strikes, which marked the first known American attacks on Iranian targets since late July. Traders reacted to the elevated risk that further military action could disrupt tanker movements through the Strait of Hormuz, a waterway that normally carries roughly a fifth of global oil supplies.
Oil markets have shown pronounced sensitivity to developments in the Middle East throughout the year, with Brent repeatedly moving as expectations shifted around military escalation, ceasefire discussions and prospects for restoring regular shipping through the strait.
Details of the operation and follow-up activity
A U.S. official said Islamic Revolutionary Guard Corps forces were observed preparing to launch rockets armed with sea mines into the strategic waterway. The operation on Larak Island targeted two such launchers.
In response to the Larak Island strikes, Iran reportedly launched missiles at U.S. forces stationed in Jordan. A U.S. source cited in a Fox News report said nearly all incoming missiles were intercepted and there had been no significant impact to date.
Supply and shipping implications
The latest escalation has revived worries about supply security in the Middle East. Shipping traffic through the Strait of Hormuz has already been significantly reduced amid months of conflict and security incidents, with reports over the weekend showing vessel crossings falling to just a handful per day.
Those reduced crossings, together with intermittent attacks and elevated risks for merchant shipping, continue to shape market expectations about how quickly and smoothly seaborne flows can recover.
Policy note
Attention to supply-side developments will also remain elevated after U.S. President Donald Trump said on Sunday that Washington would begin replenishing the Strategic Petroleum Reserve using oil obtained under a new agreement with Venezuela.
Outlook
In the near term, oil prices are likely to remain sensitive to any additional military activity, official statements on defensive measures, and changes in reported shipping movements through the Strait of Hormuz. The combination of direct strikes, retaliatory launches and already curtailed vessel crossings keeps the risk picture for energy markets uneven.