NEW YORK — Oil prices rose sharply on Monday following the U.S. Navy's seizure of an Iranian-flagged cargo ship near the Strait of Hormuz, as traders weighed risks of further disruption to a key global energy route, market participants said.
Brent crude futures climbed more than 5 percent to around $95 per barrel in early trading, while West Texas Intermediate crude rose about 5-6 percent to near $88 per barrel, according to trading data. The gains reversed some of the previous session's declines after Iran had signaled the strait might reopen during a fragile ceasefire.
The price surge came after President Donald Trump announced on Sunday that U.S. forces had fired on and disabled the Iranian vessel Touska in the Gulf of Oman before Marines boarded and seized it. The ship had attempted to bypass a U.S. naval blockade of Iranian ports imposed last week, U.S. officials said.
The Strait of Hormuz, through which about one-fifth of global oil supplies pass, has seen heightened tensions in recent weeks. Iran declared the waterway closed until the U.S. lifted its blockade and vowed retaliation after the seizure, describing the action as "armed piracy," according to Iranian state media.
A trader at a major energy firm in London said the market was reacting to the potential for prolonged instability. "Any threat to flows through Hormuz tends to push prices higher quickly," the trader noted, speaking on condition of anonymity as is common in commodity markets.
Iran's Foreign Ministry also stated on Monday that it had no plans for the next round of peace talks with the U.S. in Pakistan, further dampening hopes for de-escalation ahead of the ceasefire's scheduled expiration on Wednesday.
The U.S. Central Command confirmed the boarding operation but provided limited additional details. No casualties were reported from the incident, and the status of the ship's cargo remained unclear as of Monday.
Shipping activity in the region has been disrupted, with some vessels turning back or delaying transits amid the standoff. Analysts noted that even temporary uncertainty over the strait can tighten supply expectations, though physical oil flows were not immediately halted on a large scale.
As of Monday afternoon, oil prices were holding most of their gains but remained volatile. Market participants continued to monitor statements from both Washington and Tehran for any signs of further escalation or diplomatic progress. No official comments on the price movements were immediately available from U.S. or Iranian energy authorities.
