Oil jumped 4 per cent early on Monday, rising above $79 a barrel, after the US launched waves of attacks on Iran and Tehran said it closed the Strait of Hormuz once again.
Brent, the benchmark for two thirds of the world’s seaborne oil, was up 4.14 per cent at $79.16 per barrel at 9.01am UAE time. West Texas Intermediate, the gauge that tracks US crude, was up 2.97 per cent at $74.38 per barrel.
"Recent attacks highlight how uncertain Gulf exports remain and a serious re-escalation could reintensify the short-run upside risk to oil prices," Goldman Sachs said in a note.
The International Energy Agency flagged a potential supply risk in its latest monthly market report. Global supply rebounded by 4.1 million barrels per day in June to 98.8 million bpd as traffic through the Strait of Hormuz partially recovered, the Paris-based agency said. Global oil output remained 9.4 million bpd below the levels recorded before the war began in February.
"Renewed exchanges of fire in the Gulf this week highlight the risks of not reaching a lasting peace agreement, which is a must for the normalisation in oil markets," the agency said.
US Central Command said late on Sunday that the strait was a "vital maritime corridor for global trade" and that Iran "does not control it". Centcom said commercial transits continue and that more than 800 vessels and 400 million barrels of crude had moved through the waterway since May, including more than 140 ships in the past week.
The renewed strikes came a day after Centcom said it completed a further round of US attacks on Iran, hitting about 140 targets and bringing the tally for the past week to more than 300. Early on Monday, US forces launched a further wave of strikes, hitting "dozens" more targets and using one-way attack drones at sea for the first time, Centcom said.
Iran retaliated with drone and missile attacks on US-linked sites in Bahrain, Kuwait and Jordan, and Iran's so-called authority in the strait said passage through the waterway was "not possible". Qatar's Foreign Ministry condemned what it called a "dangerous escalation".
