Oil climbs after US strikes Iran, Trump vows to control Strait of Hormuz

Oil prices rose more than 4% on Monday after US President Donald Trump said Washington would likely take control of the Strait of Hormuz, while the United States and Iran continued exchanging strikes that threatened energy infrastructure and shipping through the strategic waterway.

“The U.S.A. will be, from this point forward, known as 'THE GUARDIAN OF THE HORMUZ STRAIT,' but as such, and as a matter of FAIRNESS, will be reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World,” Trump wrote.

Brent crude, the international oil benchmark, traded at $79.32 per barrel at 11:00 a.m. EDT, up 4.36% from the previous day's close, after climbing as high as $79.71 earlier in the day.

What happened: US Central Command said in a statement early on Monday that it struck dozens of Iranian targets overnight "at multiple locations with precision munitions to degrade Iran's ability to continue attacking international shipping flowing through the Strait of Hormuz." 

Iranian media reported explosions across the country. An official in Isfahan province told state-run outlets that a strike on a military base killed one person and injured seven others.

Among the attacked sites were two water pumping stations in the southwestern province of Khuzestan and the southern province of Bushehr, according to Iran's Press TV. Iranian officials said strikes on those sites killed one person, injured four others and temporarily disrupted the water supply to Kharg Island, the country's oil export hub, through which more than 90% of its crude shipments pass. One person was killed and four others were injured after a US projectile struck the pumping station in Mahshahr in Khuzestan province, according to Iran's Press TV.

Meanwhile, Iran's Islamic Revolutionary Guard Corps said in a statement on Monday that it was targeting US bases in Bahrain, Jordan and Kuwait, as well as radar systems in Oman. The group said it hit two US-linked air bases in Kuwait, as well as army infrastructure and a drone command center in Bahrain and the Prince Hassan Air Base in Jordan.

On Saturday, the IRGC said the waterway would be closed to what it described as unauthorized transit. After firing a warning shot at a vessel it said was attempting to transit via an "unapproved" route, the IRGC said the strait would remain shut until the end of US "interference" in the region.

Why it matters: Since the US-Israel-Iran war began on Feb. 28, traffic was nearly halted through the Strait of Hormuz amid attacks by the IRGC and a later American blockade, disrupting flows of up to 14 million barrels per day, according to the International Energy Agency. Before the war began, the waterway carried about a fifth of global oil and liquefied natural gas shipments. As a result of the conflict, energy prices surged, with Brent crude peaking at around $115 a barrel in early May.

Oil prices fell slightly in April after a fragile truce was reached between the US and Iran and fell further on June 17 when the two sides reached an interim deal to permanently end the conflict and reopen the strait. But renewed hostilities since July 7 have led to ships once again avoiding the Strait of Hormuz and oil prices returning to an upward trajectory. The renewed fighting was sparked by three attacks on tankers in the Strait of Hormuz, after which the US responded with a wave of air strikes against Iranian targets.

Know more: CENTCOM on Monday denied reports circulating on X that US forces had struck Kharg Island directly.

Trump has repeatedly threatened to target the island, most recently in a Truth Social post last week.

Reuters reported last month that there were several explosions on Kharg Island following a new wave of US strikes against Iran.

In March, the United States said it had struck military targets on the island while deliberately avoiding the country's oil export infrastructure.