Oil prices experienced a significant increase of about 5% on Monday after Iran's Fars news agency reported that a U.S. warship was hit by missiles in the Strait of Hormuz. Brent crude futures rose by $5.52, reaching $113.69 per barrel, while U.S. West Texas Intermediate increased by $5.10, hitting $107.04 per barrel. The incident, which involved a U.S. warship reportedly ignoring Iran's warnings, has raised fears of a prolonged disruption in this crucial oil transit route. Despite the U.S. denying that any ship was hit, market analysts, including Giovanni Staunovo from UBS, noted that oil prices are likely to remain elevated as long as supply flows through the Strait are restricted. The geopolitical tensions are compounded by ongoing military threats from Iran against U.S. forces in the region. Additionally, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) announced plans to increase oil output targets, although the effectiveness of this increase remains uncertain due to the ongoing conflict affecting Gulf oil supplies.