Global oil prices climbed more than 2% on Monday after fresh military strikes between the United States and Iran heightened concerns over the security of energy shipments through the Strait of Hormuz, a key global oil transit route.
Brent crude futures gained $1.67, or 2.2%, to trade at $77.68 per barrel as of 09:55 GMT, while U.S. West Texas Intermediate (WTI) crude rose $1.59, or 2.23%, to $73.00 a barrel.
Geopolitical Tensions Drive Price Surge
The rally followed renewed hostilities over the weekend, with both countries launching military strikes that reignited fears of disruptions to global oil supplies. Iran reportedly targeted U.S. facilities across the Gulf on Sunday and announced the closure of the Strait of Hormuz, one of the world’s most strategically important energy chokepoints.
On Monday, Iran’s Revolutionary Guards stated they had carried out attacks on U.S. military bases in Kuwait and Bahrain, further escalating tensions in the region. Before the conflict erupted in late February, the Strait of Hormuz handled roughly one-fifth of global daily oil and liquefied natural gas exports, making any disruption a major concern for energy markets.
Ship-tracking data from Kpler showed vessel traffic through the strait fell to a five-week low on Sunday, with only six vessels transiting the waterway during the day. The renewed hostilities have also cast uncertainty over the future of an interim agreement signed by Washington and Tehran last month, which aimed to reopen the strait and pave the way for an end to the conflict following an additional 60 days of negotiations.
Despite Iran’s announcement, U.S. President Donald Trump maintained that the Strait of Hormuz remains open to commercial traffic. Speaking during an interview on Sunday, Trump told “Meet the Press” host Kristen Welker, “It’s open, we bombed the hell out of them last night, they’re very, very evil and sick people.”
Future Supply Resilience and Market Shifts
Analysts at Goldman Sachs indicated that expanding pipeline infrastructure across the Middle East could significantly reduce the impact of future disruptions in the Strait of Hormuz. The investment bank projects that alternative pipeline capacity will increase by 3.8 million barrels per day by the end of 2027 and by a cumulative 7.3 million barrels per day by the end of 2028.
This expansion would raise the region’s effective bypass capacity to more than 14 million barrels per day, providing greater resilience against geopolitical disruptions. Meanwhile, Iranian crude supplies stored at sea have increased after Tehran boosted exports during the temporary peace arrangement with the United States.
However, demand for Iranian crude has reportedly softened as China’s independent refiners increasingly opt for cheaper supplies from Iraq, the United Arab Emirates, and Qatar. Separately, the Abu Dhabi National Oil Company (ADNOC) set the August official selling price of its benchmark Murban crude at $80.01 per barrel, a sharp decrease from $101.48 per barrel in the previous month.
Nigeria's Oil Output Reaches Six-Year High
The latest rise in oil prices coincides with Nigeria recording its strongest crude production performance in six years. According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the country produced an average of 1.56 million barrels of crude oil per day in June 2026, the highest monthly output since April 2020.
This production level exceeded Nigeria’s OPEC quota of 1.5 million barrels per day, representing 104% compliance with the target. Combined crude oil and condensate production also increased to 1.735 million barrels per day, providing a potential boost to government revenues at a time of elevated global oil prices.
With tensions in the Middle East showing little sign of easing, market participants will continue to monitor developments around the Strait of Hormuz, where any prolonged disruption could have significant implications for global energy supply and prices.
