Oil prices rise after U.S. strikes Iranian rocket launchers on Larak Island
Quick Look
- Oil prices jumped Monday after U.S. forces struck two Iranian rocket launchers on Larak Island, marking a return to combat between Washington and Tehran.
- Brent crude futures rose 3.3% to $90.99 per barrel and WTI futures gained 3.6% to $86.36.
- The U.S. strike, the first publicly acknowledged since late July, killed and wounded several Iranian soldiers.
AI-generated summary
Why It Matters
The Middle East conflict has entered its sixth month, with ongoing tensions between the U.S. and Iran. This strike represents the first publicly acknowledged U.S. attack on Iranian positions since late July, indicating a return to direct combat.
Oil prices jumped Monday after U.S. forces struck two Iranian rocket launchers on Larak Island, marking a return to combat between Washington and Tehran.
Futures for international benchmark Brent crude for September delivery gained 3.3% to trade at $90.99 a barrel. Front-month U.S. West Texas Intermediate futures added 3.6%, trading at $86.36 per barrel.
"I can confirm that earlier today U.S. forces struck two Iranian launchers on Larak Island. Islamic Revolutionary Guard Corps forces were observed preparing to launch rockets with sea mines into the Strait of Hormuz," Navy Capt. Tim Hawkins, a U.S. Central Command spokesperson, said in a statement.
According to the Associated Press, Sunday's attack was the first publicly acknowledged U.S. strike on Iranian positions since late July.
The U.S. attack on Larak Island killed and wounded several Iranian soldiers, Iran's Revolutionary Guards Corps said, adding that it has responded with attacks on American military bases in Jordan, based on reports by the Iranian media.
Meanwhile, U.S. President Donald Trump extended his military threats against Iran to Kharg Island, the country's main oil export terminal, saying in a Sunday evening Truth Social post that it's "going to be blown to smithereens!"
Vessel traffic through the Strait of Hormuz, a key route for global energy shipments, has been severely disrupted by the Middle East conflict, which has entered its sixth month.
"Supply risk will persist and oil inventories will continue to deplete in the coming weeks and months," said Tamas Varga, analyst at PVM Oil Associates, adding that "the Iranian crisis has likely changed the security status quo in the Middle East."
"Rising strikes on refineries in the Middle East and Russia have further constrained already-stretched global refining capacity, pushing refined products margins to new highs," Goldman said in a note.
—CNBC's Anniek Bao contributed to the report.
What to Watch
AI outlook — possibilities, not facts
Oil prices will remain elevated or rise further if Middle East conflict continues
Likely · Within weeks
Vessel traffic through Strait of Hormuz will remain disrupted
Very likely · Within weeks
Iran may continue retaliatory attacks on U.S. interests in the region
Likely · Within days
Open Questions
- How many Iranian soldiers were killed or wounded in the strike?
- What specific targets did Iran hit in Jordan in response?
- Will the U.S. follow through on threats to attack Kharg Island?
- How long will Strait of Hormuz disruptions last?
