Strait Tensions Rock Oil Markets: Navigating Turmoil Amid Mideast Strife

Oil prices fell by 1% on Monday, following a surge to five-month highs, as traders evaluated the potential impact of U.S. airstrikes in Iran on the oil supply via the key Strait of Hormuz. Brent crude futures decreased by 70 cents, nearly 0.9%, settling at $76.31 a barrel by 10:46 a.m. ET. Meanwhile, U.S. West Texas Intermediate (WTI) crude fell by 76 cents, or 1%, to $73.09.

Earlier, Brent and WTI touched peaks of $81.40 and $78.40 respectively, but fluctuated throughout the session amid escalating tensions. President Trump claimed the obliteration of Iran's main nuclear facilities, following a weekend of U.S. and Israeli military interventions. In response, Iran warned of defending itself, escalating fears in global markets.

Despite heightened military actions, such as Israel's strikes on Tehran and the Fordow nuclear site, analysts and market players remain wary of substantial disruptions. Although a complete blockade of the Strait—through which a fifth of global oil supply flows—is deemed unlikely, the risk of targeted attacks persists. Investors continue to assess geopolitical risks, watching closely as HSBC speculates on potential price spikes.

(With inputs from agencies.)