US oil traded 7.4% higher at $71.97 per barrel, while international standard Brent was up 7.7% at $78.46 per barrel.

Higher oil prices raise the prospect of costlier gasoline prices for U.S. drivers as well as for other goods at a time when people in many countries have been stung by inflation.

A key focus was the situation around the strait at the southern end of the Persian Gulf, through which 20% of the world’s oil supply passes. Tanker traffic dropped sharply amid disruption of satellite navigation systems, data and analytics firm Kpler said on X, while the UK Maritime Trade Operations Centre reported attacks on several vessels in the area on either side of the strait and warned of elevated electronic interference to systems that show where ships are.

A bomb-carrying drone boat struck a Marshall Islands-flagged oil tanker in the Gulf of Oman on Monday, killing one mariner on board, Oman said. Iran has been threatening vessels approaching the Strait of Hormuz and is believed to have launched multiple attacks.

Saudi authorities reported they intercepted Iranian drones that attacked the Ras Tanura oil refinery near Dammam and the refinery was shut down as a precaution, Saudi state television reported. Market attention has focused on whether the conflict would widen to other oil-producing countries in the region.

Monday’s price increase was within the $5-$10 per barrel range expected by analysts based simply on the fear factor associated with the outbreak of war. And some war concerns were already reflected in the price before the conflict started.

However, long-term disruption to ship traffic in the strait could send prices even higher, and so could damage to oil infrastructure in other Gulf countries. Meanwhile, a shorter conflict in which disruptions are easily reversible could mean the current price spike won’t last.