Oil jumps 5% after reports of US warship hit by missiles

Oil prices rose by about 5% on Monday after the Iranian news agency Fars reported an incident involving a US warship in the Strait of Hormuz, reigniting fears of prolonged disruption to this vital oil shipping route.

At 10:25 GMT, the Brent futures contract was up $5.52, or 5.1%, at $113.69 per barrel, after closing down $2.23 on Friday. The US West Texas Intermediate (WTI) gained $5.10, or 5%, to $107.04 per barrel, following a $3.13 decline on Friday.

An American warship trying to pass through the strait was forced to turn back after ignoring warnings from Iran, Fars reported on Monday, citing local sources. The ship reportedly was hit by two missiles near Jask.

The Iranian navy also said it had prevented US warships from entering the Strait of Hormuz area.

Reuters could not independently verify these reports.

There was no immediate response from the United States, but Axios quoted a senior US official denying that an American ship had been hit.

Prices were already rising during the session due to ongoing disruptions in oil supplies through the strait.

“The price trajectory remains upward as long as flows through the strait remain restricted,” said Giovanni Staunovo, analyst at UBS.

President Donald Trump said the US would make efforts to assist ships stuck in the Strait of Hormuz, but prices remained above $100 per barrel, with no peace agreement in sight and maritime transport through this strategic waterway still hindered.

In response, the Iranian military warned US forces on Monday not to enter the strait, stating that its forces would “respond harshly” to any threats.

Trump has made reaching a nuclear agreement with Tehran a priority, but Iran wants to postpone nuclear discussions after the war and first lift rival blockades on shipping in the Gulf.

Meanwhile, the United Kingdom Maritime Trade Operations agency reported on Monday that a tanker had reported being hit by unknown projectiles while passing near Fujairah, in the United Arab Emirates.

On Sunday, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, declared they would raise oil production targets by 188,000 barrels per day in June for seven members, marking the third consecutive monthly increase.

This increase matches the agreed amount for May, minus the share of the United Arab Emirates, which left OPEC on May 1. However, these additional barrels are likely to remain largely theoretical as long as the war with Iran continues to disrupt Gulf oil supplies through the Strait of Hormuz.