(Sharecast News) - Oil prices rose on Monday as the US insisted the Strait of Hormuz was open, despite Iran claiming it had closed the vital waterway following further military exchanges.
At 0742 BST, Brent crude was up 3.9% at $79.00 a barrel and West Texas Intermediate was 4% higher at $74.28.

The US Central Command (Centcom) said on Saturday that it had struck more than 140 targets across Iran in response to Tehran attacking another commercial ship in the Strait of Hormuz.

"US forces hit approximately 140 Iranian military targets with precision munitions launched by land- and sea-based fighter aircraft, drones, and naval vessels," it said. Targets included Iranian missile and drone sites, naval capabilities, ammunition storage facilities, communication networks, and coastal surveillance locations.

Centcom said that during three nights of strikes last week, it struck more than 300 targets "to degrade Iran's ability to attack civilian mariners and commercial vessels freely transiting the strait".

"Commercial vessel transits through the vital international maritime corridor continue," it added.

On Sunday, Centcom said it had completed a new wave of strikes against Iran, hitting dozens of targets at multiple locations with precision munitions. US forces struck Iranian military air-defence systems, coastal radar sites, missile and drone capabilities, and small boats.

"The Strait of Hormuz is a vital maritime corridor for global trade," it said, adding that "Iran does not control it".

In retaliation for the US strikes on Saturday, Iran fired missiles and drones at the United Arab Emirates, Qatar, Kuwait, Oman, and Bahrain early on Sunday morning.

Susannah Streeter, chief investment strategist at Wealth Club, said: "The war has underlined the huge importance of the waterway, which is so vital for shipments from the region. The Strait has become the United States' Achilles' heel in this conflict and Iran's strongest bargaining chip. It's a strategic chokepoint that gives Tehran disproportionate leverage despite America's overwhelming military superiority.

"With the chance of negotiations seizing up again, and this fresh flare-up of attacks, it's sent oil prices racing up 4% above $79 a barrel. European and UK gas prices have also surged, back up to levels last seen a month ago. While prices are still not at crisis levels, the creep upwards will ignite fresh inflationary worries and concerns about how far higher interest rates could move. That's being reflected in the bond markets, with yields on gilts and US Treasuries rising, demonstrating how investors are becoming increasingly skittish about how far central bank policy will have to move to keep a lid on inflation."

Stephen Innes, managing partner at SPI Asset Management, said: "Oil traders will now watch throughput rather than rhetoric. Tanker crossings, freight rates, war risk insurance and physical crude differentials will tell the real story. A declaration can move the front-month contract for a few hours. A sustained reduction in cargo volumes can shift the entire oil complex, hence the inflation curve.

"The current oil price still reflects confidence that neither Washington nor Tehran wants a full regional war. Brent remains far below its wartime peak, and June supply recovered sharply after the earlier ceasefire. But global output remains well below prewar levels, leaving less spare protection if traffic deteriorates again."

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