Brent crude climbed above $90 per barrel on Monday as renewed military confrontation between the United States and Iran raised concerns over oil shipments through the Strait of Hormuz.
The international benchmark gained $2.21, or 2.51 percent to $90.31 per barrel during early trading, while U.S. West Texas Intermediate crude advanced $1.83, or 2.19 percent to $85.23 per barrel.
The latest increase followed fresh attacks around the Strait of Hormuz, one of the world’s most important energy transportation corridors.
U.S. forces struck two Iranian launchers on Larak Island on Sunday, the first known American attack inside Iran since late July.
Iran subsequently retaliated against U.S. military positions in Jordan, extending a conflict that has repeatedly disrupted crude production, shipping and energy infrastructure across the Middle East.
Fresh uncertainty also emerged around Kharg Island, the principal terminal through which Iran exports crude.
U.S. President Donald Trump said the island was under attack on Monday, although there was no immediate independent confirmation of the extent of the operation.
Any significant disruption around Kharg could further increase uncertainty in the crude market because of the terminal’s importance to Iranian petroleum exports.
The renewed confrontation has shifted investors’ attention back towards the security of the Strait of Hormuz after recent diplomatic efforts had raised expectations that shipping conditions could improve.
The waterway was responsible for roughly one-fifth of global oil and liquefied natural gas flows before the conflict disrupted normal maritime activity earlier this year.
However, crude shipments from the Gulf have recovered considerably from their earlier lows despite continuing security risks.
Goldman Sachs estimates that total Gulf oil exports have risen to between 15 million and 16 million barrels per day.
That is about 5 million to 6 million barrels per day above levels recorded during the worst period of disruption in March, although shipments remain roughly 7 million to 8 million barrels per day below pre-war volumes.
The recovery in exports has helped prevent the supply disruption from translating into even higher crude prices.
Oil traders are now assessing whether the latest military escalation will reverse those improvements, particularly if renewed attacks make tanker operators more reluctant to move through the region.
Shipping through Hormuz has already become more complicated and expensive as vessel owners contend with security threats and increased insurance and transportation costs.
The latest crude-price increase also comes as the United States seeks alternative sources of supply.
Trump said oil associated with a recently announced agreement with Venezuela would be used to replenish the U.S. Strategic Petroleum Reserve, which has declined to around 290 million barrels.
The reserve was near a 44-year low as of August 21 following releases made in response to supply disruptions and high energy prices in recent years.
However, significant additional Venezuelan production is unlikely to reach the market immediately because the country’s oil industry requires substantial investment and infrastructure rehabilitation.
That leaves Middle Eastern supply conditions as one of the most important short-term drivers of global crude prices.
For Nigeria, Brent’s return above $90 strengthens the potential revenue outlook for crude exports, particularly if the country can maintain or increase production.
Higher international oil prices could improve dollar inflows and government petroleum revenue, providing additional support for Nigeria’s external position.
The impact is not entirely positive.
More expensive crude also increases feedstock costs for refiners and can place upward pressure on domestic petroleum-product prices if higher production costs are passed through to marketers and consumers.
That relationship has become increasingly important as Nigeria relies more heavily on domestic refining while petrol prices remain exposed to movements in international crude and foreign exchange markets.
Oil traders will therefore be watching developments around Hormuz closely this week for indications that the latest attacks are temporary or represent the beginning of another prolonged escalation.
Any material reduction in Gulf exports could push crude prices higher, while sustained recovery in tanker movements could limit the geopolitical premium currently supporting Brent above $90 per barrel.
