Oil jumps 3 percent after US, Iran escalate strikes in Mideast

SINGAPORE: Oil prices jumped on Monday as Iran expanded strikes on Gulf states following attacks by the United ​States, threatening energy shipments via the Strait of Hormuz.
Brent crude futures climbed $2.34, or 3.08 percent, to $78.35 by 2311 GMT, while US West Texas Intermediate crude rose $2.21, or 3.09 percent, to $73.62 a barrel.
Over the weekend, Tehran extended strikes on Qatar and the United Arab Emirates while the US launched further strikes on Iran, ‌the latest ‌in a cycle of attacks ​and ‌counter-attacks ⁠over shipping ​through the ⁠strait.
US President Donald Trump said on Sunday that the Strait of Hormuz is open to commercial traffic, although Iran declared earlier that it closed the strait after a vessel traveled on an unapproved route and was struck.
Six vessels transited the strait on Sunday, ⁠shiptracking data from Kpler showed, the lowest ‌number in five weeks.
The ‌escalating attacks cast further doubt ​on the future of an ‌interim US-Iranian agreement signed last month that aimed to ‌reopen the strait and end the war after a further 60 days of negotiations.
Following the agreement, global oil supply rose by 4.1 million barrels per day in June, ‌but remained 9.4 million bpd below pre-war levels, the International Energy Agency said in its ⁠monthly ⁠report on Friday.
“Hopes of a relatively quick resolution to the recent skirmishes may be in doubt after tension escalated over the weekend,” ANZ analysts said in a note.
IG market analyst Tony Sycamore said the relatively tame rise in oil prices suggested the market was taking the view that the current flare up represented an escalation within a fragile truce and fell well short of a complete collapse ​of the ceasefire.
“How accurate ​that view is remains to be seen,” he said in a note.