SINGAPORE: Global oil prices rose on Monday after US and Iranian forces exchanged attacks on vessels near Iran, heightening fears that renewed fighting could further disrupt energy supplies through the Gulf.
The latest escalation involved strikes on vessels as the confrontation between Washington and Tehran increasingly extends to maritime traffic around Iran and the Strait of Hormuz.
Oil markets have become increasingly sensitive to developments around the strait, through which a significant share of the world’s internationally traded petroleum normally passes.
The latest attacks follow strikes over the weekend involving Iranian oil carriers and other vessels, adding to concerns over the safety of commercial shipping and the ability of exporters to move crude through the region.
The confrontation has also complicated efforts by oil producers to stabilise global supplies. Even where additional production capacity is available, disruption to shipping routes can prevent crude from reaching international buyers.
Traders are consequently attaching a larger geopolitical risk premium to oil prices as they assess whether the US-Iran confrontation will remain concentrated around Iranian waters or spread further across Gulf shipping lanes.
Any prolonged disruption to maritime traffic could have repercussions well beyond the Middle East, raising transport and energy costs for major oil-importing economies across Asia and Europe.