Oil prices rise after US strike on Iran's nuclear centres
Oil prices rose on Monday after the US entered the Israel-Iran war at the weekend, stoking fears that an escalation could affect global energy supplies.
Brent, the benchmark for two thirds of the world's oil, was trading 1.75 per cent higher at $78.36 a barrel at 6.55am on Monday. West Texas Intermediate, the gauge that tracks US crude, jumped 1.83 per cent to $75.19 per barrel.
Brent settled at $77.01 a barrel on Friday, while WTI at $73.84.
The US struck three nuclear facilities in Iran on Saturday, with President Donald Trump saying on Sunday that the damage to the nuclear sites in Iran was 'monumental'.
Meanwhile, Iran said it was ready to defend itself by 'all necessary means' after the US strikes.
Foreign Ministry spokesman Esmail Baghaei condemned what he described on X as an 'unconscionable act of aggression'.
The war, which began on June 13 when Israel attacked Iran's nuclear centres, has rattled investors and led to rising concerns about energy security.
On Sunday, Iranian state-owned media cited a legislator as saying that Iran's parliament agreed to close the Strait of Hormuz, a gateway for about a fifth of the world's daily oil output. However, the final decision is with Iran's national security council, the report said.
Oil prices could surge to as much as $150 a barrel if traffic in the Strait of Hormuz is halted, according to analysts.
US Secretary of State Marco Rubio urged China on Sunday to prevent Iran from closing the strait. China is Iran's key oil importer.
'It remains in the collective interest of the region to keep the Strait of Hormuz open and avoid any disruption to supply,' said Mukesh Sahdev, Rystad Energy's global head of commodity markets for oil.
Flows through the Strait of Hormuz are being affected, even if the major fear of a blockade is yet to be realised, he said in a note on Friday.
Oil vessel flows have increased, probably to get it out of land terminals and storage, he said.
'Iran may be expediting exports, with indications of a 30 per cent to 40 per cent increase in oil shipments since the attacks began, compared to average June volumes prior to the escalation,' he added.
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