Oil prices jumped on Monday as fresh hostilities between the US and Iran raised fears of prolonged disruptions to energy flows through the Strait of Hormuz. West Texas Intermediate traded above $86 after advancing 2.8% in the previous session, while Brent closed near $90.

US forces struck an island in Hormuz, while Iran retaliated with attacks on the United Arab Emirates and Jordan, marking the first exchange of fire in about a month. The crude oil tanker Giannis unloaded its cargo of Middle Eastern crude at the Motor Oil terminal in Agioi Theodoroi, near Corinth, Greece, on Aug. 24, following its departure from the United Arab Emirates' bunkering hub of Fujairah.

The escalation threatens to tighten global supply at a time when markets are already sensitive to geopolitical risk. Traders are watching the Strait of Hormuz closely, as any sustained closure would remove significant volumes from the market.