Oil prices extended their gains on Monday as renewed US-Iran attacks involving vessels in and around the Strait of Hormuz raised concerns that disruptions to Middle Eastern crude flows could persist. Brent crude moved closer to $100 a barrel after a sharp weekly rally, reinforcing the growing influence of geopolitical risk on energy markets and broader inflation expectations.

Strait of Hormuz Becomes the Central Supply Risk

Brent crude futures rose 52 cents, or 0.54%, to $96.80 a barrel, while US West Texas Intermediate gained 66 cents, or 0.72%, to $92.14. The moves followed a much stronger performance last week, when Brent advanced 7.8% and WTI gained nearly 10%.

The Strait of Hormuz remains at the center of the market’s concerns. Roughly one-fifth of global oil supply has historically passed through the waterway, making any sustained disruption potentially significant for refiners, traders and major importing economies across Asia and Europe.

Shipping activity has already weakened. Around 10 commodity vessels per day transited the Strait over the latest 10-day period, the lowest level recorded since May. Iran has also indicated that it plans to establish a restricted zone outside the Strait, adding another layer of uncertainty for commercial shipping.

US-Iran Strikes Raise the Cost of Maritime Risk

The latest escalation has blurred the distinction between military and commercial shipping risks. US forces struck three Iranian oil tankers on Saturday, including a vessel near Kharg Island, a major Iranian oil-export hub. Iran subsequently said its forces targeted vessels traveling through unauthorized routes in the Strait and additional US vessels elsewhere.

For energy markets, the immediate concern is not only physical damage to ships or infrastructure but whether shipping companies become increasingly reluctant to operate in the region. Higher insurance costs, longer routes and delays could increase the delivered cost of crude even if production capacity remains available.

The impact could extend beyond crude prices. A prolonged disruption would raise transportation and refining costs, potentially feeding into gasoline, diesel and other consumer prices at a time when central banks are already monitoring inflation closely.

OPEC+ Holds Policy Steady as Disruptions Mount

OPEC+ decided to leave its October oil production policy unchanged after meeting on Sunday. The decision follows six consecutive monthly production increases and reflects the difficulty of adjusting supply policy while geopolitical disruptions are already constraining physical flows.

The producer group is also working toward new production quotas and baseline assessments for 2027. However, additional output from OPEC+ members may have limited immediate impact if tankers cannot move crude efficiently through critical shipping routes.

Markets will therefore remain highly sensitive to developments in the Strait of Hormuz, including shipping volumes, military activity and diplomatic efforts. Analysts expect a prolonged standoff could keep Middle Eastern exports constrained through the end of 2026, with a broader recovery potentially extending into 2027.

Investors and policymakers will be watching whether oil remains near the $100 threshold or whether improved shipping conditions allow prices to retreat. The next phase of the conflict, the security of commercial vessels and the ability of producers to compensate for disrupted exports will be central to determining the direction of global energy prices and inflation expectations.