Crude oil prices jumped sharply on Monday, with Brent crude rising above $107 a barrel, amid escalating tensions in the Middle East raising fears of disruptions to global energy supplies.
Brent for November delivery gained 3.20 per cent to $107.82 a barrel, while US benchmark West Texas Intermediate for October rose 3.20 per cent to $103.2, extending last week’s rally that pushed both contracts back above the $100 mark.
Markets remained focused on security developments in the Gulf and Red Sea shipping lanes which faced severe disruptions as Houthi forces seized key ports, which underpin a large share of the world’s seaborne oil trade.
The surge in oil prices followed reports that Saudi Arabia temporarily shut its East‑West pipeline after drone attacks and that a merchant vessel was struck in the Strait of Hormuz on Sunday, with Iranian authorities saying one person was killed and three injured.
Iran has tightened control over the strait, requiring vessels to seek permission to transit and considering a mechanism to impose service fees, while non‑compliant ships have faced strikes.
The United States also bombed the Iranian coastline to challenge the Islamic republic’s control of the strait.
Meanwhile, Oman also postponed talks between Iran and Gulf states on the future of the strategic waterway.
Brent prices have risen over 30 per cent from lows recorded in early August after efforts to secure a permanent agreement between the US and Iran to halt attacks failed to materialise. Fighting resumed later in August, adding to concerns over the security of crude supplies from the Gulf region.
Supply worries have been compounded by a steep fall in Saudi Arabia’s oil production. Saudi Arabia reported to OPEC that it produced 6.2 million barrels per day in August, the lowest monthly output recorded in 2026 and 23 per cent below July levels.
The decline comes after Iran-backed Houthi rebels in Yemen threatened oil shipments from Saudi Arabia’s west coast.
