Oil prices climb as US-Iran tanker strikes escalate in Gulf

Oil prices extended their gains on Monday as tit-for-tat strikes between the United States and Iran on commercial vessels intensified concerns about prolonged supply disruptions from the Middle East.

Brent crude futures climbed 52 cents, or 0.54%, to $96.80 a barrel, while US West Texas Intermediate crude rose 66 cents, or 0.72%, to $92.14 a barrel. Last week, Brent gained 7.8% and WTI nearly 10% after the two countries resumed attacks, reducing oil flows through the Strait of Hormuz, which typically carries about a fifth of the world's oil supply.

US Central Command said its forces struck three Iranian oil tankers on Saturday, including one off the coast of Kharg Island, near Iran's main oil export hub. In response, the navy of Iran's Islamic Revolutionary Guard Corps said it targeted three oil tankers travelling through unauthorised routes in the Strait of Hormuz, as well as three additional US vessels in other areas.

Maritime intelligence firm Marisks described the Saturday attacks as a "major escalation in the maritime conflict," noting that commercial tankers are now being deliberately used as instruments of reciprocal economic pressure, weakening the distinction between military confrontation and commercial shipping.

Data from analytics firm Kpler showed an average of 10 commodity ships transited the Strait of Hormuz per day over the past 10 days, the lowest since May. Meanwhile, Iran's Supreme National Security Council secretary, Mohsen Rezaei, said a restricted zone would be announced outside the strait in the coming days, according to state media.

OPEC+ kept its oil output policy unchanged for October at a meeting on Sunday, as the producer group needs to agree on new quotas before deciding its next output steps.

ANZ analysts said a prolonged standoff with calibrated military action by both sides appears the most likely scenario, which would delay the full recovery of Middle East supply. They expect exports to remain constrained through the rest of 2026, with a gradual reopening late in the fourth quarter, and a return to pre-war throughput not expected until late first quarter or early second quarter of 2027.