Brent crude futures were up $2.47, or 3.25pc, to $78.48 at 4:45pm PKT, while US West Texas Intermediate crude was up $2.35, or 3.29pc, to $73.76 a barrel.

“The focus will remain on the number of inbound tankers as a lower number could impact production, so currently we see a risk premium but as well a disruption risk supporting prices,” said UBS analyst Giovanni Staunovo.

Fresh US and Iranian strikes over the weekend fueled fears of a renewed escalation. Tehran targeted US facilities across the Gulf on Sunday and said it had again closed the Strait of Hormuz.

Iran’s Revolutionary Guards said on Monday they had attacked US military bases in Kuwait and Bahrain.

Some 20pc of the world’s oil and liquefied natural gas transited the strait before the war began at the end of February.

“Shipping operators are adopting a cautious approach and inbound movements have slowed under heightening security concerns,” ANZ analysts said.

Vessel traffic through the strait fell to a five-week low on Sunday, ship-tracking data showed. Six vessels transited the strait on Sunday, according to Kpler.

The escalating attacks cast further doubt on the future of an interim US-Iranian agreement signed last month that aimed to reopen the strait and end the war after a further 60 days of negotiations.

Following the agreement, global oil supply rose by 4.1 million barrels per day in June, but remained 9.4m bpd below pre-war levels, the International Energy Agency said in its monthly report on Friday.

US President Donald Trump said on Sunday that the Strait of Hormuz was open to commercial traffic, although Iran declared earlier that it had closed the strait after a vessel had travelled on an unapproved route and was struck.

Goldman Sachs estimated that expanding pipeline capacity in the Middle East could shield more than 60pc of pre-war Gulf oil exports from any future Hormuz disruptions by end-2028.

The bank’s base-case forecast assumes pipeline capacity bypassing Hormuz will rise by 3.8m bpd by end-2027 and 7.3m bpd cumulatively by end-2028, taking total effective bypass capacity to more than 14m bpd by end-2028.

Iranian oil supplies held at sea are rising after Tehran boosted exports during the interim peace deal with the US. However, sales have been slow as China’s independent refiners have turned to cheaper crude from Iraq, the UAE and Qatar.

The Abu Dhabi National Oil Company (Adnoc) set the August official selling price of its benchmark Murban crude at $80.01 a barrel, it said on Monday, down from $101.48 a barrel the month before.

Elsewhere, Ukraine’s Security Service said it struck an oil depot in Russia’s Stavropol region overnight, as well as three storage tanks at an oil-loading site in the port of Kavkaz in the southern Russian region of Krasnodar.

Hasina faces a death sentence in Bangladesh and her party is banned following a popular uprising against her long rule in 2024, which the United Nations said killed 1,400 people. She has been living in New Delhi since August of that year.

“Sheikh Hasina is a convicted criminal. If she surrenders, action will be taken against her as per the laws of Bangladesh,” Shama Obaed Islam, Bangladesh’s state minister for foreign affairs, told reporters. “She will have to go to jail and further proceedings will follow as per the provisions of the law.”

The country’s war-crimes court sentenced Hasina in November to death in absentia for ordering a deadly crackdown on a student-led uprising. She has denied the charges from exile.

Bangladesh is now governed by Prime Minister Tarique Rahman’s administration, which took office in February after elections and is seeking to stabilise the country following two years of political turmoil.

Bangladesh has asked India to extradite Hasina, and New Delhi said in April it was examining the request and that it wanted to “engage constructively with the new government and further strengthen bilateral ties”.

Hasina, in her first interview during her exile, told Reuters last week she intended to return voluntarily. She said many of her party colleagues living abroad since her ouster would also return to face trial.

“Cases have been filed against almost all of our leaders and workers, and many of them are in hiding,” Hasina said. “So I said that this time I am returning home, and one day, all of you should come. All together, we will all surrender in court.”

Obaed said Hasina’s recent statement was “an attempt to mobilise fugitive party leaders and activists”.

As the US attacks on Iran continued on Monday, Tehran said it would stop complying with a framework agreement signed in June to halt the fighting if Washington failed to meet its commitments.

It also responded with attacks of its own targeting Gulf nations, with the powerful Revolutionary Guards (IRGC) announcing new strikes on Bahrain, Jordan, Kuwait and Oman.

“There is no doubt that this document is in crisis,” foreign ministry spokesman Esmaeil Baqaei said of the Islamabad Memorandum of Understanding.

“Each time that the other party has failed to meet its obligations, we did not uphold ours,” he added.

“We will continue to act in this manner.”

He nonetheless added that Tehran was continuing talks with mediators from Qatar, Pakistan and Oman in an effort to prevent any further escalation.

The US Central Command (Centcom) said its forces had completed their latest barrage, which began overnight, on dozens of Iranian targets.

US aircraft, naval vessels and drones hit “dozens of targets at multiple locations with precision munitions to degrade Iran’s ability to continue attacking international shipping flowing through the Strait of Hormuz”.

The latest salvo by US forces began at 2am PKT on Sunday, Centcom said on X. The fresh strikes came less than 24 hours after a previous wave in which Centcom said 140 Iranian military targets were hit.

Iranian state media reported two deaths in the latest US strikes that it said targeted large areas across the south and west.

One person was killed and four wounded at a water pumping station in the southwestern city of Mahshahr, state news agency IRNA said.

Iranian state media reported that the latest US strikes targeted large areas across southern and western Iran, including Qeshm island and Bandar Abbas near the Strait of Hormuz, and in Khuzestan province bordering Iraq.

‘Futile efforts’

The past week’s hostilities have centred on the critical energy trade route, which Iran’s IRGC says is “closed” but which the US maintains is open to maritime traffic and not controlled by Iran.

Oil prices, which tumbled after the announcement of the June agreement, jumped by up to 4.5 per cent, with the US benchmark WTI climbing to nearly $74 a barrel on fears of hampered supply on global markets.

Mediators have been trying to salvage a diplomatic resolution to the war after US President Donald Trump this week said he considered the peace MoU “over” but let the door remain open for talks.

Pakistan, a key intermediary in negotiations, on Sunday expressed “deep concern at escalation in regional tensions”.

Iran’s foreign ministry said the US attacks had “caused the return of insecurity in the Strait of Hormuz” and “rendered futile all efforts” at establishing peace in the region.

But analyst Bader Al-Saif said the escalating attacks would merely delay a permanent agreement.

“Both sides want to end the impasse on their own terms, and they are increasingly finding it difficult to do so. Hence the return to and increase in the scale of attacks,” said Al-Saif, an associate fellow at Chatham House.

“That only prolongs what will eventually happen: a negotiated settlement.”

Attacks in Gulf countries

Iran’s IRGC said it had struck US military targets and bases in Jordan, Bahrain and Kuwait, state media reported on Monday.

IRNA cited several statements released by the Guards saying they had attacked Prince Hassan Air Base in Jordan, a US military drone command centre in Bahrain and airbases including Ali Al Salem in Kuwait.

The IRGC also said its missile and drone attacks had set fire to fuel storage tanks and ammunition depots on the Jordanian base used by the US military.

It said missiles and drones hit Jordan’s Prince Hassan Air Base. The attack was the first phase of the response to the latest US strikes.

It also said that a military base at Bahrain’s Sheikh Isa was hit in the second phase of the retaliatory operation.

The US Fifth Fleet headquarters is in Bahrain, but it is not at Sheikh Isa, which is a Bahraini base. However, the base has hosted US military operations and aircraft.

Revolutionary Guards also claimed attacks on Ali Al Salem and Ahmad Al Jaber military bases in Kuwait. Both these bases are Kuwaiti but host the US military.

It also said an air defence unit destroyed a Low-Cost Uncrewed Combat Attack System (Lucas) drone belonging to the US military near the Iranian port city of Bandar Abbas on Monday, Mehr News reported.

There was no immediate US response to the statement.

The IRGC statement also said that ending US military interventions in the Strait of Hormuz was the only way to restore vessel passage.

It warned that continued interference could lead to greater incidents in the global oil and gas sector.

Air raid alerts sounded in Bahrain, while Kuwait’s army said the country’s forces were intercepting “hostile aerial targets” on Monday.

Jordan’s army said it had intercepted four Iranian missiles.

Bahrain’s military accused Iran of committing “heinous attacks with missiles and drones that target civilians”, adding it had shot down a number of Iranian projectiles Monday morning.

The renewed fighting followed an Iranian attack early on Sunday on a commercial ship in the Strait of Hormuz whose crew was forced to abandon it after it went up in flames.

Iran’s IRGC said after the incident that “the Strait of Hormuz will be closed until further notice and until the end of American interventions in this region,” according to state news agency IRNA.

US Centcom countered on X that the strait was “open to all vessels seeking to lawfully transit”.

Back and forth strikes

On Sunday evening, Iran reported strikes on two of its southern islands while Kuwait, where Tehran has repeatedly targeted US installations, said border posts and an offshore oil platform had been attacked.

The renewed fighting followed what Iran described as a warning shot on a commercial ship in the Strait of Hormuz. The vessel’s crew was forced to abandon it after it went up in flames.

Iran’s Revolutionary Guards said after the incident that “the Strait of Hormuz would be closed until further notice and until the end of American interventions in this region,” according to state news agency IRNA.

The US Centcom countered on X that the strait was “open to all vessels seeking to lawfully transit”. The military command added that US forces were “positioned and prepared to ensure” freedom of navigation, claiming: “Iran does not control the strait. Traffic is flowing.”

Ship-tracking data from Kpler showed six vessels passed through the strait on Sunday — the lowest number in five weeks.

Iranian state media reported explosions in several port cities on Sunday.

In response, the IRGC said it had destroyed a command-and-control centre and drone hangars in US ally Jordan, targeted a US radar site in Kuwait, attacked US aircraft carrier support and refuelling platforms in Oman, and destroyed a jet maintenance centre and command facility in ​Qatar.

Mediators, including Pakistan, have been trying to salvage a diplomatic solution to end the war after President Donald Trump this week declared that a ceasefire agreed with Iran after the signing of the interim accord on June 18 was over.

Deputy Prime Minister and Foreign Minister Ishaq Dar called for “de-escalation” on Sunday during a phone call Iranian Foreign Minister Abbas Araghchi.

“Dialogue and diplomacy remain the only viable path to resolving disputes and achieving lasting peace,” Dar said.

UN Secretary General Antonio Guterres also called for peace, with his spokesman saying “these attacks must stop. “

Iran’s foreign ministry said the US attacks on Sunday had “caused the return of insecurity in the Strait of Hormuz” and “have rendered futile all efforts” at establishing peace in the region.

Control of the strategic Strait of Hormuz has become key leverage for Iran, with an adviser to the country’s supreme leader on Sunday saying it was more important than “dozens of atomic bombs”.