Oil prices surged more than 3% on Monday after renewed military strikes between the United States and Iran reignited concerns over energy shipments through the Strait of Hormuz.
Brent crude futures were up $2.67, or 3.51%, to $78.68 at 0743 GMT, while U.S. West Texas Intermediate crude was up $2.48, or 3.47%, to $73.89 a barrel.
Oman Crude for September delivery was up $2.82 to $72.11 per barrel on Monday. It may be noted that the monthly average price of Omani crude oil for July delivery reached $102 per barrel.
"Shipping operators are adopting a cautious approach and inbound movements have slowed under heightening security concerns," ANZ analysts said.
Fresh U.S. and Iranian strikes over the weekend fuelled fears of a renewed escalation. Tehran targeted U.S. facilities across the Gulf on Sunday and said it had again closed the Strait of Hormuz.
Iran's Revolutionary Guards said on Monday they had attacked U.S. military bases in Kuwait and Bahrain. Before the conflict began in late February, the Strait of Hormuz handled about one-fifth of global daily oil and liquefied natural gas supplies.
Vessel traffic through the strait fell to a five-week low on Sunday, ship-tracking data showed. Six vessels transited the strait on Sunday, according to Kpler.
The escalating attacks cast 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. Global oil supply rose by 4.1 million barrels per day in June following the agreement, but remained 9.4 million bpd below pre-war levels, the International Energy Agency said in its monthly report on Friday.
U.S. President Donald Trump said on Sunday that the Strait of Hormuz remained open to commercial traffic, despite Iran's earlier declaration that it had closed the waterway after a vessel travelled on an unauthorised route and was struck. Goldman Sachs estimated that expanding pipeline capacity in the Middle East could shield more than 60% of pre-war Gulf oil exports from any future Hormuz disruptions by end-2028.
The bank's base-case forecast assumes pipeline capacity bypassing Hormuz will rise by 3.8 million bpd by end-2027 and 7.3 million bpd cumulatively by end-2028, taking total effective bypass capacity to more than 14 million bpd by end-2028.
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