Oil prices have started the week higher as tensions in the Middle East flare again.
At the time of writing, US crude oil is up 1.68% to US$84.84 a barrel, while Brent crude is 1.69% higher at US$89.79 a barrel.
The latest gains add to what has already been a strong year for oil, with both benchmarks up around 48% in 2026.
The move comes after US forces carried out their first strike on Iranian targets in weeks, putting the Strait of Hormuz back in focus.
Here's what investors need to know.
Image source: Getty Images
What is pushing oil prices higher?
Another flare-up between the United States and Iran is putting the oil market back on edge.
US forces struck two Iranian launchers on Larak Island in the Strait of Hormuz on Sunday, marking the first known American strikes on Iran since late July.
A US official said Islamic Revolutionary Guard Corps (IRGC) forces had been preparing to launch rockets carrying sea mines into the Strait of Hormuz.
The IRGC said the attack killed and wounded several soldiers and civilians, while also warning that Tehran would respond.
US President Donald Trump said last week that mines had been cleared or removed from international waters in the strait. He also warned that any ships or boats laying new mines would be destroyed.
Why is the Strait of Hormuz important?
The Strait of Hormuz remains one of the biggest issues hanging over the oil market.
Before the current conflict, around 1/5th of global oil consumption passed through the waterway.
The war involving the US and Iran has now passed the 6-month mark, with shipping through the strait disrupted during that period.
Oil prices had actually fallen late last week as markets weighed reports of possible progress around Hormuz.
Brent fell 0.43% on Friday and WTI slipped 0.16%, leaving the benchmarks down more than 5% and 4% respectively for the week.
Oil has already had a huge year
Oil prices were already sitting on strong gains before Monday's jump.
According to Trading Economics, US crude is up 47% so far this year and 31% over the past 12 months.
Brent crude has followed a similar path, rising 47% year to date and 31% over the past year.
There is plenty happening in the background as well, with markets also watching the Trump administration's latest sanctions against Iran.
US Treasury Secretary Scott Bessent last week announced "Operation Economic Outcast", which targets Iranian entities, oil trading networks, vessels and financial links.
Reuters reported that nearly 60 entities, individuals and vessels were included in the latest round of sanctions.
What should investors watch?
The Strait of Hormuz is the big one to keep an eye on from here.
Any response from Iran, changes to shipping through the strait or further US sanctions could quickly put the oil market back in focus.
Interest rates are another factor investors will be watching. Federal Reserve Chair Kevin Warsh recently said rates may need to rise if inflation does not move back toward the Fed's 2% target.
