Oil jumps 3% after US, Iran escalate strikes in Mideast

Oil prices jumped on Monday as Iran expanded strikes on Gulf states following attacks by ​the United States, threatening energy shipments via the Strait of Hormuz.

Brent ‌crude futures climbed $2.34, or 3.08%, to $78.35 by 2311 GMT, while U.S. West Texas Intermediate crude rose $2.21, or 3.09%, to $73.62 a barrel.

Over the weekend, Tehran extended strikes on Qatar ​and the United Arab Emirates while the U.S. launched further strikes ​on Iran, the latest in a cycle of attacks and ⁠counter-attacks over shipping through the strait.

US President Donald Trump said on Sunday ​that the Strait of Hormuz is open to commercial traffic, although Iran ​declared earlier that it closed the strait after a vessel traveled on an unapproved route and was struck.

Six vessels transited the strait on Sunday, shiptracking data from Kpler showed, ​the lowest number in five weeks.

The escalating attacks cast further doubt ​on the future of an interim U.S.-Iranian agreement signed last month that aimed to reopen ‌the ⁠strait and end the war after a further 60 days of negotiations.

Following the agreement, global oil supply rose by 4.1 million barrels per day in June, but remained 9.4 million bpd below pre-war levels, the International Energy ​Agency said in its ​monthly report ⁠on Friday.

"Hopes of a relatively quick resolution to the recent skirmishes may be in doubt after tension escalated over ​the weekend," ANZ analysts said in a note.

IG market ​analyst Tony ⁠Sycamore said the relatively tame rise in oil prices suggested the market was taking the view that the current flare up represented an escalation within ⁠a ​fragile truce and fell well short of a ​complete collapse of the ceasefire.

"How accurate that view is remains to be seen," he said ​in a note.

-Reuters