Brent Crude futures reclaimed the $90-per-barrel level on Monday the 31st, as U.S. military strikes on rocket launchers at Iran’s Larak Island near the Strait of Hormuz on the 30th reignited concerns over Middle East crude supply. This marks the first confirmed direct U.S. military attack on Iran since late July.
As of 7:02 a.m. Japan time on the 31st, Brent Crude traded at $90.32 per barrel, up $2.22 (2.52%) from the prior weekend’s close. U.S. WTI crude also advanced $2.01 (2.41%) to $85.41. November-delivery Brent briefly topped $90, while WTI was bid up to near $86 at one point.
According to U.S. Central Command (CENTCOM) spokesman Tim Hawkins, the launchers targeted in the strike were in the process of preparing to deploy mines into the Strait of Hormuz. Hawkins said U.S. forces took military action to prevent such activity. The strike brings an end to the relatively calm period between the United States and Iran that had prevailed over recent weeks.
This month’s oil market has seen a $17 trading range
The crude market has been highly sensitive to shifts in Middle East dynamics throughout this month. Brent Crude’s monthly trading range has reached approximately $17. As negotiations to end the U.S.-Iran conflict have repeatedly advanced and stalled, Washington’s posture of intensifying economic pressure on Iran and cornering Tehran has amplified price swings.
Some market participants have assessed the actual U.S. response as “not as hawkish as expected.” Even so, the resumption of armed conflict at the Strait of Hormuz — a critical chokepoint for global crude transport — has forced supply disruption risk back into prices.
Meanwhile, crude shipments through the Strait of Hormuz have not come to a complete stop. Estimates from traders tracking cargo movements indicate that roughly 6–8 million barrels per day of crude continue to transit the strait even in the absence of a U.S.-Iran peace agreement.
Iran’s semi-official Mehr News Agency reported that “limited vessel transit” is taking place along shipping lanes approved by Iranian authorities. According to the agency, vessels using these lanes are paying transit fees.
Trading volumes for Brent Crude futures may be thinner than usual on the 31st, as parts of the United Kingdom observe a public holiday. Caution is warranted given the potential for price swings amid reduced liquidity.
The crude market’s focus will remain on the degree of military tension around the Strait of Hormuz and the trajectory of U.S.-Iran diplomatic negotiations. In particular, reports that Iran is collecting transit fees could become a new flashpoint in the dispute over “freedom of navigation” through the strait.
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