Oil prices rose by 3% amid the expansion of US and Iran strikes in the Middle East

Oil prices jumped about 3% on Monday, with Brent crude prices exceeding $90 per barrel, as the escalation of military actions between the US and Iran in the Middle East restricted oil supplies through the Strait of Hormuz, UNN reports citing Reuters.

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Brent crude oil futures rose by $2.77, or 3.14%, to $90.87 by 06:12 GMT (09:12 Kyiv time), reaching the highest level since June 11, extending gains after a 15.9% rise last week, the largest weekly increase since April.

US West Texas Intermediate crude, rising by $2.35, or 2.85%, stood at $84.84 per barrel, the highest level since June 12. Oil prices for next-month delivery rose 15.5% last week, the largest weekly gain since early March.

The conflict in the Middle East escalated over the weekend, as the US carried out a ninth consecutive night of attacks on Iran, while US allies Kuwait and Bahrain reported new Iranian strikes.

US Central Command (CENTCOM) said on Monday it had "successfully completed a ninth consecutive series of strikes on Iran on the evening of July 19 at 10:00 p.m. ET (05:00 Kyiv time)." "CENTCOM forces struck Iranian military command posts, air defense and coastal surveillance facilities, naval facilities, missile and drone launch sites, and communications networks to further degrade Iran's ability to attack commercial vessels and civilian mariners transiting the Strait of Hormuz," CENTCOM reported.

According to Iran's semi-official Tasnim news agency, US missiles hit several Iranian cities early Monday morning. Explosions were heard in Tabriz, Chabahar, Konarak, Bandar Mahshahr, and Bandar Imam Khomeini, the report said. State news agency IRNA reported, according to AFP, that overnight US strikes hit several facilities in Bushehr, a southern port city of Iran where the country's only civilian nuclear power plant is located. No details on casualties or damage were reported. Iran's Revolutionary Guard said it struck US military targets in Kuwait and shelled US aircraft at Aqaba Airport in Jordan with ballistic missiles, while sirens sounded in Bahrain on Monday, and also announced an unexpected strike on "the enemy's special operations headquarters in the Al-Tanf area in Syria," The Guardian reports.

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"Brent crude oil prices exceeded $90 per barrel this morning, and the escalation in the Persian Gulf does not stop," said a note from ING analysts published on Monday.

"The US and Iran continue to exchange strikes that are proving deadly for both sides. If this escalation remains unchecked, we could return to a situation of large-scale attacks across the Persian Gulf," the analysis said.

Iran's Islamic Revolutionary Guard Corps said on Monday that two oil tankers exploded and were immobilized after attempting to take a dangerous southern route through the Strait of Hormuz, as it called it, claiming they were incited to do so by the US military.

In recent days, both sides have targeted shipping: the US claims a naval blockade of Iranian ports, while Iran says it is pursuing vessels that violate its navigation rules through the Strait of Hormuz, through which a fifth of the world's oil trade normally passes.

Early Monday morning, the UK Maritime Trade Operations Center reported a fire on a vessel northwest of Kumzar in Oman.

"In the coming days and weeks, it will become clearer how sustainable the level of oil exports from the region will be under the renewed dual blockade," Barclays analyst Amarpreet Singh noted in his note.

"In the current situation, we believe that oil markets are still too complacent about the potential consequences for inventories, which, unlike at the start of the war, are at their lowest level in five years," he added.

According to LSEG, four vessels passed through the Strait of Hormuz on Sunday, compared to eight a day earlier. At least three product tankers and one very large crude carrier have entered the strait since Friday to load oil.