Summary
- US warship was hit by two missiles, Iran’s Fars says
- US Central Command denies any US vessel was struck
- US to start operation to aid stranded ships, Trump says
- OPEC+ agrees third oil output quota hike since Hormuz closure
(Reuters) – Oil prices rose over 3% on Monday after Iran claimed it had struck a U.S. warship and forced it to turn back from entering the Strait of Hormuz, though the U.S. denied that any U.S. ships had been struck.
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Brent crude futures were up $3.64, or 3.4%, at $111.81 a barrel by 1124 GMT, having settled down $2.23 on Friday. U.S. West Texas Intermediate was up $3.40, or 3.3%, at $105.34 a barrel, after a $3.13 loss on Friday.
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Fars reported on Monday citing local sources that it had struck a U.S. warship intending to pass through the Strait and forced it to turn back. U.S. Central Command denied that any U.S. Navy ships had been struck on Monday.
Prices were already trading up in the session on continued disruptions to oil supplies through the strait.
“The path for prices remains skewed to the upside as long as flows through the Strait remain restricted,” UBS analyst Giovanni Staunovo said.
President Donald Trump said the U.S. would begin efforts to assist ships stranded in the Strait of Hormuz, but prices stayed above $100 a barrel, with no peace deal in sight and shipping through the strategic waterway still constrained.
Iran’s military warned U.S. forces on Monday not to enter the strait, saying it would “respond harshly” to any threat.
Trump has made securing a nuclear deal with Tehran a priority, but Iran wants to defer nuclear talks until after the war and first lift rival blockades on Gulf shipping.
Meanwhile, the United Kingdom Maritime Trade Operations agency said on Monday a tanker had reported being hit by unknown projectiles while transiting near Fujairah in the United Arab Emirates.
On Sunday, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, said it would raise oil output targets by 188,000 barrels per day in June for seven members, marking the third consecutive monthly increase.
The rise matches that agreed for May, minus the share of the United Arab Emirates, which left OPEC on May 1. However, the additional barrels are expected to remain largely on paper as long as the Iran war continues to disrupt Gulf oil supplies through the Strait of Hormuz.
Additional reporting by Florence Tan and Sudarshan Varadhan. Editing by Mark Potter, Louise Heavens and Bernadette Baum
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