US oil benchmark surges 7.5% on Middle East escalation
The benchmark US oil contract West Texas Intermediate (WTI) surged 7.5 percent on Monday, as Iran accused the United States of having broken a ceasefire in place since early April.
WTI crude was trading up 7.5 percent at $90.17 per barrel, while international oil benchmark Brent North Sea crude gained 6.5 percent to $96.27 per barrel.
Iran's military vowed to respond after a US destroyer on Sunday fired on an Iranian-flagged cargo ship in the Gulf of Oman that tried to evade a US naval blockade.
Meanwhile the Strait of Hormuz, a vital conduit for the world's oil and liquefied natural gas, has been virtually closed since the start of the US-Israeli war with Iran.
Social media posts by US President Donald Trump over the weekend "raised the prospect of military re-escalation", Chris Weston at Pepperstone wrote in a note on Monday.
"More impactful on markets, however, has been the news that the US military seized an Iranian vessel in the Gulf of Oman, with Iran responding that it would retaliate," he said.
"With flows through Hormuz again at a firm standstill, traders are reassessing probabilities and the timeline for a normalisation for logistics and adjusting positioning after the more constructive assumptions made last week."
Trum posted Sunday on Truth Social that after the Iranian vessel, Touska, ignored warnings to stop, the guided missile destroyer USS Spruance "stopped them right in their tracks by blowing a hole in the engineroom".
"Right now, U.S. Marines have custody of the vessel," the US president added, "and are seeing what's on board!"
The Iranian military's central command centre, Khatam Al-Anbiya, cited by ISNA news agency, accused the United States of having "violated the ceasefire" that has been in place since April 8.
- Latest
- Trending
