Oil Prices Surge as US and Iran Resume Direct Military Attacks

Global oil prices rose sharply on Monday after the United States and Iran resumed direct military attacks for the first time since late July. The US Central Command confirmed that American forces conducted a limited and precise strike against two Iranian rocket launchers on Larak Island in the Strait of Hormuz. US officials stated the action was taken after the Islamic Revolutionary Guard Corps was observed preparing to launch rockets with sea mines into the strategic waterway. In response, the Iranian Revolutionary Guard claimed to have launched ballistic missiles at two US air bases in Jordan, causing grave damage. Some reports also mentioned Iranian drone attacks on a US base in the United Arab Emirates, though the UAE defense ministry dismissed those claims as false while confirming it engaged an Iranian drone over its waters.

The escalation caused the Brent crude benchmark to spike over 3 percent, reaching above 90 dollars per barrel. The West Texas Intermediate (WTI) also rose, surpassing 86 dollars. Market reactions were mixed across global stock exchanges. Wall Street opened lower, with the Dow Jones and S&P 500 declining as investors reacted to the geopolitical instability. Conversely, some European and Brazilian markets saw gains in energy sectors, with companies like Petrobras and Eni seeing share price increases due to the rising cost of oil.

Further tensions emerged when US President Donald Trump posted an AI generated video on Truth Social claiming that Iran's oil hub, Kharg Island, had been destroyed. US officials and Iranian representatives both stated that no such attack on Kharg Island occurred, and Reuters confirmed the video was synthetically generated. Iranian President Masoud Pezeshkian stated that Iran still seeks a negotiated solution to the conflict, though he accused the US of failing to fulfill past commitments.

This latest clash occurs within a broader conflict that began on February 28 with joint US and Israeli attacks on Iran. While a ceasefire was reached in April and a protocol agreement was attempted in June, hostilities resumed in July and diplomacy remains at a stalemate. Amidst the conflict, President Trump announced a deal with Venezuela to extract billions of barrels of crude oil over the coming years to replenish the US Strategic Petroleum Reserve.