Oil prices extended their gains on Monday after tit-for-tat strikes between the United States and Iran on vessels in the Strait of Hormuz raised concerns of a prolonged supply disruption from the Middle East.
Brent crude futures climbed 79 cents, or 0.82 per cent, to $97.07 a barrel by 0512 GMT, while US West Texas Intermediate was at $92.28, up 80 cents or 0.87 per cent, Hiru News reported, carrying Reuters copy. An earlier snapshot reported by Ada Derana had Brent at $96.80 and WTI at $92.14, indicating prices firmed through the morning.
Brent rose 7.8 per cent last week and WTI gained nearly 10 per cent after the two sides resumed attacks, cutting flows through the strait — a channel through which a fifth of the world’s oil supply used to transit.
The weekend strikes
US forces struck three Iranian oil tankers on Saturday, US Central Command said, including one off the coast of Kharg Island, near Iran’s main oil export terminal.
The navy of Iran’s Islamic Revolutionary Guard Corps said the same day that it had targeted three oil tankers travelling through what it called unauthorised routes in the Strait of Hormuz, along with three additional US-affiliated vessels elsewhere. Tehran described its strikes as retaliation for the attacks on the Iranian tankers.
Maritime intelligence firm Marisks called the Saturday attacks a “major escalation in the maritime conflict.”
“Commercial tankers are now being deliberately used as instruments of reciprocal economic pressure, substantially weakening the previous distinction between military confrontation and commercial shipping,” the firm said.
Since the US–Israel war on Iran began on 28 February, Brent has risen more than 30 per cent.
The exchange marks a sharp escalation from the smaller incident last week, when US Central Command dismissed an Iranian claim of a strike on an unmanned US vessel as “a total lie.”
For Sri Lanka, which imports all its crude and refined fuel, the disruption is already being felt in the search for alternative crude suppliers and in shortages of Gulf-sourced bitumen.
