CRUDE oil prices rose on Monday as continued conflict between the United States and Iran heightened concerns over disruptions to energy shipments through the Strait of Hormuz, following another round of U.S. strikes and American military casualties.
International benchmark Brent crude for September delivery rose about 2.77% to top US$90 per barrel, while U.S. West Texas Intermediate crude for August delivery climbed roughly 2.4% to US$84.49, extending last week's sharp gains.
The rally followed Iran's declaration that its ceasefire with Washington had effectively collapsed, while Tehran said it had intercepted four vessels travelling through the strategic Strait of Hormuz over the weekend.
The US military also reported the death of a third American service member in two days as both sides continued exchanging attacks.
The conflict has expanded beyond military targets, with critical infrastructure including bridges, utilities and port facilities coming under attack. Kuwait Petroleum Corporation said an Iranian strike hit one of its oil facilities on Saturday.
Oil prices have surged nearly 30 per cent from their July lows after the collapse of a temporary peace arrangement between Washington and Tehran, the resumption of a US blockade on Iranian ports and intensified Iranian attacks near the Strait of Hormuz.
The escalation has heightened fears over the security of one of the world's most important oil transit routes, where any prolonged disruption could further pressure global energy markets.
CNBC cited Quantum Strategy’s David Roche saying that the global crude market has become significantly tighter as Gulf exports dwindle.
“At this rate of depletion oil inventories get tight in September and even the U.S. gets stressed. That will up the TACO pressure on President Trump. Stay long Brent with a target of US$95 to US$105 a barrel.”
Meanwhile, the US dollar strengthened against major currencies as investors moved towards safer assets amid mounting geopolitical risks, higher oil prices and concerns that inflationary pressures could persist.
The dollar index traded near 101 on Monday after rising for two consecutive sessions, supported by expectations that a sustained increase in energy costs could influence the Federal Reserve's interest rate decisions.
Markets are now pricing in a greater possibility of a Federal Reserve rate increase in September, with expectations rising to about 53 per cent from 47 per cent a day earlier. However, policymakers are still widely expected to keep rates unchanged at this month's meeting.
During early Asian trading, the greenback edged higher against most major currencies as investors remained cautious following market turbulence last week.
Reuters reported that the US dollar gained 0.1 per cent against the Japanese yen to ¥162.48, its strongest level since July 9, as geopolitical tensions boosted demand for safe-haven assets.
The euro weakened 0.1 per cent to US$1.1426, while the British pound was steady at US$1.3445. The Australian dollar slipped 0.1 per cent to US$0.6975, while the New Zealand dollar fell 0.2 per cent to US$0.5833.
"FX markets were relatively subdued, with the USD broadly stable, while the AUD weakened against the greenback and most major currencies," Westpac analysts said in a research note.
"Market sentiment continued to deteriorate as concerns around semiconductor valuations weighed on risk appetite, while tensions in the Middle East escalated after Iran suspended its commitments under the interim peace deal."
Despite rising geopolitical risks, investors continue to expect the Federal Reserve to hold interest rates steady at its policy meeting on July 29.
According to the CME Group's FedWatch tool, futures markets are pricing an 85.6 per cent probability of a rate hold, compared with 61.5 per cent a month earlier.
However, Cleveland Federal Reserve President Beth Hammack has joined a growing group of policymakers warning that interest rates may need to rise further to contain persistent inflation, setting the stage for a potentially divided debate at the central bank's upcoming meeting.
The US dollar index, which tracks the greenback against a basket of six major currencies, rose 0.1 per cent to 100.84.
In cryptocurrency markets, Bitcoin gained 0.2 per cent to US$64,637.89, while Ether rose 0.2 per cent to US$1,869.72. - July 20, 2026
