Oil opened with a gap higher on Sunday evening US time, Monday morning in Asia, as a fresh night of escalation left little doubt the conflict is deepening rather than cooling. President Trump’s confirmation that Iran was struck very hard again, alongside a spread of reported explosions across Iranian cities including Bandar Mahshahr, Bandar Imam Khomeini, Sirik, Chabahar, Konarak and Tabriz, points to a broader and more geographically dispersed campaign than earlier in the conflict. That comes on top of everything the market has already been pricing this weekend, from Iran’s claim to have mined and destroyed two tankers in the Strait of Hormuz, to reports the Pentagon is increasing aircraft in the region and an unnamed US official’s acknowledgment that Washington is planning for a wider war. A fresh ship fire in the strait, confirmed by the British military, and a Bahrain embassy warning of possible Iranian targeting in central Manama add further immediate risk to shipping and regional infrastructure. Against that backdrop, Secretary of State Rubio’s comment that the US remains open to a diplomatic resolution offers a rare counterpoint, but with strikes continuing nightly and explosions spreading across Iran, the market’s gap higher looks like a fair reflection of where risk currently sits.
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Oil’s gap higher this morning tells you everything about how the weekend in the Middle East went.
Earlier:
- Iran says two tankers mined and blown up in Strait of Hormuz
- Brent tops $90 as US, Iran attacks intensify across Middle East – where we’re at
Summary:
- Oil opened with a gap higher on Sunday evening US time, Monday morning Asia time, extending a rally that had already pushed Brent above $90
- President Trump said “we struck Iran very hard again tonight,” confirming a fresh round of US attacks
- Iran’s semi-official Tasnim news agency reported multiple explosions in southwestern Bandar Mahshahr and Bandar Imam Khomeini, while Mehr reported blasts in Sirik, Chabahar and Konarak, and Fars reported explosion noises in Hormozgan and Bushehr
- Iran’s Press TV reported US attacks on the Iranian city of Tabriz
- Britain’s military said a ship was on fire in the Strait of Hormuz near the Omani coast, according to the Associated Press
- The US embassy in Bahrain’s Manama warned Iran could target unspecified sites in central Manama and urged Americans to stay alert
- Kuwait’s army said its air defences were responding to hostile drone threats
- Secretary of State Rubio said the US remains open to a diplomatic resolution in Iran, while separately saying he is willing to meet China’s Wang Yi in the Philippines and expects President Xi to visit the US in September
- China’s central bank kept its one-year and five-year loan prime rates unchanged and injected 398.5 billion yuan via seven-day reverse repos
Oil opened with a gap higher on Sunday evening US time, Monday morning in Asia, as a night of fresh strikes and explosions across Iran left the market pricing in further escalation rather than any near-term easing of the conflict.
President Trump confirmed the latest round of attacks, saying “we struck Iran very hard again tonight,” as reports emerged of blasts and military activity spreading across a wider stretch of Iranian territory than in recent nights.
Iran’s semi-official Tasnim news agency reported multiple explosions in the southwestern cities of Bandar Mahshahr and Bandar Imam Khomeini, while Mehr news agency reported locals hearing blasts in southern Sirik and southeastern Chabahar, and said Iranian air defence systems had been activated in Konarak. Fars News Agency reported explosion noises detected in the southern Hormozgan and Bushehr regions, and Iran’s Press TV reported US attacks on the northwestern city of Tabriz, suggesting the latest wave of strikes extended well beyond the coastal and Strait of Hormuz-adjacent targets hit in earlier nights.
The escalation also touched shipping directly. Britain’s military said a vessel was on fire in the Strait of Hormuz near the Omani coast, according to the Associated Press, adding to the disruption already flagged by Iran’s claim to have mined and destroyed two tankers attempting the southern route over the weekend. The US embassy in Bahrain’s Manama warned that Iran could target unspecified sites in the capital and urged American citizens to stay alert and follow local authorities’ guidance, while Kuwait’s army said its air defences were actively responding to hostile drone threats.
The overnight developments build directly on a weekend of escalation that has already reshaped the oil market’s risk calculus, including reports the Pentagon is increasing the number of military aircraft in the region and an unnamed US official’s acknowledgment that Washington is planning for a wider war. Brent crude had already climbed above $90 a barrel before this latest round of strikes, and the fresh explosions, tanker and ship fire incidents, and expanding geographic scope of the conflict all point toward sustained upside risk for oil as the new trading week gets underway.
Against that backdrop, Secretary of State Marco Rubio struck a more conciliatory note, saying the US remains open to a diplomatic resolution in Iran. Rubio separately said he is willing to meet China’s Wang Yi in the Philippines and that he expects President Xi Jinping to visit the United States in September, while noting a meeting with Lebanon’s president had proven very positive.
This article was written by Eamonn Sheridan at investinglive.com.