The recent oil gains came alongside an escalation in the conflict.

Oil prices jumped at the start of trading on Monday, reaching their highest in more than a month, touching $90 a barrel, amid a wave of buying driven by growing fears of potential disruptions to global crude supplies as tensions escalate between the United States and Iran that have limited oil shipments through the Strait of Hormuz. Brent crude futures rose $1.03, or 1.17%, to $89.13 a barrel, the highest since June 11, extending their sharp gains of 15.9% last week. This was Brent's biggest weekly gain since April.

U.S. West Texas Intermediate crude rose 65 cents, or 0.79%, to $83.14, its highest since June 12. Futures prices rose 15.5% last week, the biggest weekly gain since early March.

The rises coincided with an escalation of the conflict between the United States and Iran, heightening fears of wider tensions in the Middle East, which includes some of the world's largest oil-producing and exporting countries.

Giovanni Staunovo, an analyst at UBS, said: "I think the oil market is tightening again, which is likely to support oil prices. Repeated attacks on ships transiting the Strait of Hormuz have reduced the number of oil tankers leaving the Gulf."

The Middle East conflict escalated over the weekend, with the U.S. launching a ninth consecutive night of strikes on Iran, while Kuwait and Bahrain reported more Iranian attacks. Iran's Revolutionary Guards said on Monday they had disabled two oil tankers following explosions as they attempted to cross what it described as an unsafe southern passage through the Strait of Hormuz, claiming the U.S. military had encouraged them to use this passage.

Analysts at ANZ Bank said in a note: "The supply outlook has become more pessimistic. The expected recovery in shipping has effectively stalled, with transit volumes through the Strait of Hormuz falling to single digits." Data from the London Stock Exchange Group showed four ships crossed the Strait of Hormuz on Sunday, down from eight the previous day. The data also showed at least three oil product tankers and a very large crude carrier entering the strait since Friday to load oil.

In recent days, both sides have targeted maritime traffic, with the U.S. announcing a naval blockade of Iranian ports, while Iran said it was targeting vessels violating its navigation rules in the Strait of Hormuz. The UK Maritime Trade Operations center reported early Monday that a fire broke out on a ship northwest of the Omani city of Khasab. Shipping data showed that Gulf states raised their crude oil and condensate exports in the first half of July to their highest since before the Iran war began in late February, despite slowing oil flows through the Strait of Hormuz as fighting escalated.

The collapse of the U.S.-Iran ceasefire has reignited fears about energy supplies passing through the strait. Before the war, about 20% of global oil supplies passed through this waterway. Iran has also pressured the Houthis to close the Red Sea route if the U.S. attacks Iranian energy infrastructure. Investors are closely watching the crisis, amid fears that continued escalation could disrupt oil flows through vital maritime corridors, supporting continued upward pressure on crude prices in the coming period. In market developments, Israel raised its natural gas exports to Egypt by about 26.3% to 1.2 billion cubic feet per day currently, compared to about 950 million cubic feet per day in June, after the implementation of the first phase of the amended gas export agreement between the two countries. An official said the additional volumes, about 250 million cubic feet per day, are being supplied from the Leviathan and Tamar fields in the eastern Mediterranean, explaining that the increase was scheduled for last February, but regional tensions and the military escalation between Israel and Iran prevented its implementation on time.

He added that the amended agreement stipulates increasing supplies to Egypt in three phases, starting with an additional 250 million cubic feet per day, then the increase rising to 400 million cubic feet per day by January 2027, with total supplies reaching about 1.4 billion cubic feet per day.

He noted that the increase will reach 600 million cubic feet per day by January 2029, raising total supplies to about 1.6 billion cubic feet per day, following the completion of the new pipeline to receive additional volumes and the construction of a gas compression station for the Tamar and Leviathan fields.

Meanwhile, thousands of trucks are transporting Iraqi oil through Syria, a sign of the legacy of the Strait of Hormuz crisis, quickly turning Damascus into the largest export hub in the Middle East. In just a few months, Syria has gone from exporting no volumes of this fuel to accounting for more than a quarter of Middle Eastern exports. Supplies arrive on thousands of trucks that can take about four days to reach Syrian ports on the Mediterranean, illustrating how the war with Iran is redrawing energy flows in the region.

Gulf states are seeking ways to reduce their dependence on Hormuz for exports, including using existing pipelines or building new ones, and expanding port infrastructure outside the waterway.