- Brent crude climbed to $90.53 per barrel on Monday.
- Iran warned it could launch military action in the Strait of Hormuz if diplomatic efforts fail.
- Rising tensions threaten to disrupt a major route for global oil and gas shipments.
Brent crude rose above $90 per barrel on Monday as renewed tensions between Iran and the United States raised fresh concerns about the security of shipping through the Strait of Hormuz.
Eko Hot Blog reports that the international benchmark climbed to $90.53 per barrel, gaining $2.01, or 2.27 per cent, according to oil market data. US West Texas Intermediate crude also increased by $1.85, or 2.25 per cent, to $84.25 per barrel.
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The latest increase followed warnings from an Iranian official that Tehran could escalate military operations around the Strait of Hormuz if diplomatic efforts to end the conflict with the United States fail.
According to reports, the official said Iran had shifted its position from defensive operations to a more offensive posture following a deadlock in negotiations.
The official warned that Iran was prepared to take what he described as difficult decisions regarding the strategic waterway if diplomatic efforts failed.
The development has heightened concerns over possible disruption to tanker traffic through the Strait of Hormuz, one of the world’s most important energy corridors.
A significant portion of global oil and liquefied natural gas supplies traditionally passes through the waterway, making any prolonged disruption a potential threat to international energy markets.
Efforts to revive negotiations between Washington and Tehran have reportedly stalled, with disagreements over the management and security of the waterway remaining a major obstacle.
The tensions are linked to an agreement reached in June that provided a 60-day period for the United States and Iran to negotiate a broader settlement involving Iran’s nuclear programme and US sanctions.
However, the interim arrangement broke down amid disagreements over control of the Strait of Hormuz.
Iran maintains that the agreement gave it authority to manage the waterway, while the United States has rejected that interpretation.
The dispute has contributed to renewed hostilities, including attacks involving vessels attempting to pass through routes Iran considered unauthorised.
US President Donald Trump later declared the agreement terminated and has continued to issue strong warnings against Tehran.
Trump also warned Oman against interfering with efforts surrounding the Iran deal, adding another layer of tension to the situation.
The renewed uncertainty has already affected oil prices. Crude had traded below $80 per barrel earlier in August amid expectations that tensions around the Strait of Hormuz would ease.
The latest surge above $90 therefore represents a significant reversal and could increase pressure on global fuel prices if the situation deteriorates further.
For oil-producing countries, including Nigeria, sustained increases in international crude prices could have implications for government revenues and foreign exchange earnings.
However, the impact on consumers and the wider economy will depend on several factors, including production levels, domestic refining capacity and exchange-rate movements.
Markets are expected to closely monitor developments around the Strait of Hormuz as diplomatic efforts continue and concerns grow over a possible escalation in the region.
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