Oil jumps more than 2pc after US attack on Iran's Larak island

In response, Iran attacked two U.S. air bases in Jordan, Iranian media ​reported on Monday citing Iran's Revolutionary Guards. "Looks like we are in another escalation phase. How long that lasts ​is impossible to determine.

Could be days, could be weeks," IG market analyst Tony Sycamore said. Technical charts showed that if the conflict escalated and pushed WTI above resistance at $85.80 to $85.90 a barrel, it would open the way for further gains, initially to ​last week's $87.69 high followed by July's $93.50 high, Sycamore said.

Negotiations to end the conflict are at an impasse ​while mediators work to reopen the Strait of Hormuz, through which a fifth of the world's oil flowed before the war ‌began ⁠at the end of February.

U.S. Treasury Secretary Scott Bessent the U.S. is likely to issue new secondary sanctions weekly on Iran, with the aim of cutting the Islamic republic off entirely from the dollar-based financial system. Brent and WTI are set to post small declines in August after falling more than 4% ​last week, in what ​was their first weekly ⁠decline in three.

While the path to a deal to reopen the strait is elusive, increases in oil flows through the Hormuz strait kept concern over supply disruption in ​check, ANZ analysts said in a client note.

The number of visible commodity vessels ​that sailed ⁠through the Strait of Hormuz over the weekend dropped to five a day, shipping data showed on Monday, reflecting caution among companies wary of attacks on ships. The United Kingdom Maritime Trade Operations reported on Sunday that a tanker was struck ⁠by a ​projectile while sailing inbound through the strait on Saturday.

'For years, the region was the market investors loved to overlook. U.S. President Donald Trump ​said on Sunday that oil from a recently struck deal with Venezuela will be used to replenish the U.S. Strategic Petroleum Reserve which ​has dropped near its lowest level in 44 years.