Oil prices rose again on Monday after a new exchange of attacks involving U.S. forces, Iran and tankers around the Strait of Hormuz, extending a rally that has already rebuilt a substantial geopolitical premium. Brent crude futures were up $1.20, or 1.25%, at $97.48 a barrel at 0727 GMT, while U.S. West Texas Intermediate gained $1.14 to $92.62, according to Reuters. Brent climbed 7.8% last week and WTI rose nearly 10%.
The immediate move may look restrained beside the military headlines. U.S. Central Command said American forces struck three Iranian oil tankers on Saturday after Navy warships were targeted with ballistic missiles. The Associated Press reported that two carriers were disabled and an unladen tanker was destroyed, according to the U.S. account. Iran’s state broadcaster subsequently said Iranian forces targeted three tankers and three American vessels, a claim AP said could not immediately be confirmed.
Markets are therefore confronting two layers of uncertainty at once: what happened and what it means for future traffic. On Sunday, Mohsen Rezaei, the head of Iran’s Supreme National Security Council, said Tehran would announce an exclusion zone outside the strait aimed at vessels it believes are trying to pass through. Details were limited. The U.S. military also denied an Iranian claim that it had struck an uncrewed American military vessel.
For investors, the critical issue is not the loss of three individual ships. It is whether attacks and restrictions further discourage commercial voyages through a waterway that was already operating far below its prewar capacity. Reuters cited Kpler data showing an average of 10 commodity ships a day transited Hormuz during the past 10 days, the lowest rate since May. That makes marginal changes in traffic more consequential than they would be in a normally functioning market.
The U.S. Energy Information Administration estimates that crude oil and petroleum liquids moving through Hormuz averaged 4.9 million barrels a day in the second quarter, down from 21.6 million in the fourth quarter of 2025, before the conflict. Producers have rerouted some barrels. Flows through Bab el-Mandeb rose to 8.1 million barrels a day from 5.4 million as Saudi Arabia shifted crude through its East-West pipeline to the Red Sea. Yet the EIA cautions that alternative routes are slower, costlier and constrained by capacity.
That helps explain why Monday’s price gain is meaningful even though it is smaller than last week’s rally. The market has adapted through rerouting, reduced demand and lower production, but adaptation has not restored the old supply cushion. The EIA estimated production shut-ins averaged 5.5 million barrels a day in July and forecast global inventories would fall by another 3.8 million barrels a day on average in the third quarter.
The physical risk is also reaching vessel-level decisions. An active U.S. Maritime Administration advisory says the threat of Iranian attacks on commercial shipping in the Persian Gulf, Strait of Hormuz and Gulf of Oman remains high. It advises U.S.-flagged operators to conduct pre-voyage risk assessments, coordinate with naval authorities and account for missile, drone and navigation-interference threats. Those precautions show why available capacity on paper cannot be treated as readily deliverable supply.
Seven OPEC+ countries maintained September’s required production levels for October at a meeting on Sunday, according to the group’s statement. In ordinary circumstances, steady policy might reassure traders that producers are not adding another source of volatility. In this setting, however, quotas cannot by themselves move barrels past a maritime chokepoint or restart production that has been shut in because exports are constrained.
The result is a market with an unusual balance of resistance and fragility. Demand adjustment and alternate routes may help explain why each escalation has not produced an unchecked price spike. But depleted inventories, restricted transit and direct attacks on energy assets leave less room for the next disruption. Monday’s relatively measured rise should not be mistaken for confidence that the supply problem is solved. It is better read as evidence that oil has already absorbed a large shock, while the buffer against another one remains thin.