Oil prices rose on Monday after a weekend of US and Iranian military exchanges rattled energy markets and cast fresh doubt on the fragile recovery of shipping through the Strait of Hormuz.
Brent crude futures climbed 1.3% to $72.91 a barrel, while US West Texas Intermediate rose 1.9% to $70.56, recovering from Friday’s dip below $70, its lowest since the day before the Iran war began on February 28.
The weekend’s strikes were triggered by an Iranian drone attack on the Panama-flagged tanker Kiku, carrying more than two million barrels of crude oil. US Central Command responded by hitting 10 Iranian military targets along the Hormuz coastline. Iran retaliated with missiles and drones targeting US bases in Bahrain and Kuwait before both sides agreed to stand down.
ING analysts Warren Patterson and Ewa Manthey warned markets appeared to be shrugging off these developments too quickly, leaving significant upside price risk if supply recovery slows or re-escalation returns.
