Brent crude surged past $90 a barrel on Monday for the first time since 11 June, rising more than 3% to touch $90.79, while West Texas Intermediate climbed to $84.68. The move extended a rally that saw Brent gain 15.9% last week — its steepest weekly advance since April — as the ninth consecutive night of US strikes on Iran and retaliatory Iranian attacks choked traffic through the Strait of Hormuz.

The squeeze on the world’s most critical oil chokepoint intensified over the weekend. Only four vessels transited the strait on Sunday, down from eight a day earlier, LSEG data showed, after Iran’s Revolutionary Guard said two tankers exploded while attempting a southern passage and a separate vessel caught fire northwest of Oman’s Kumzar. Washington says it is enforcing a naval blockade on Iranian ports; Tehran insists it is targeting ships that violate its navigation rules. The dual blockades have slashed loadings, with just three product tankers and one Very Large Crude Carrier entering the strait since Friday. Barclays analyst Amarpreet Singh warned that oil markets “are still too complacent about the potential fallout for inventories”, which stand at their tightest in five years. Quantum Strategy’s David Roche recommended staying long Brent with a $95–$105 target, citing the risk of inventory depletion by September.

The military escalation has broadened well beyond shipping lanes. US Central Command said strikes now aim to “further diminish” Iran’s ability to attack commercial vessels, while Iran struck oil and gas infrastructure in Kuwait and activated air defences across Bahrain and Jordan. The US confirmed a third service member’s death, bringing its toll to 17. Iran’s Supreme Leader Mojtaba Khamenei declared the interim April deal “totally without value”, and Tehran reportedly asked Ansar Allah in Yemen to prepare to close the Red Sea’s Bab el-Mandeb strait, which carries about 7% of global crude. In financial markets, the escalation drove a safe-haven bid into the dollar, while South Korea’s Kospi fell more than 4% and triggered a temporary trading halt. European natural gas prices rose 4%, and the IMF cautioned that renewed tensions would harm global growth and add to inflationary pressures.

Traders in Asia and Europe now price a roughly 53% chance of a Federal Reserve rate increase in September, up from 47% a day earlier, though the central bank is still widely expected to hold steady at its 29 July meeting. The immediate focus remains on the Strait of Hormuz, where any further drop in transits or a spillover closure of the Red Sea would compound supply fears. The coming days will reveal whether the current pace of loadings can be sustained under the de facto dual blockade, and whether diplomatic channels can arrest the slide back toward open conflict.