Crude oil prices moved sharply higher in early Asian trade on Monday as renewed tensions between the US and Iran raised concerns about a possible disruption to oil supplies and added to worries over energy-driven inflation.

The US military reportedly struck Iranian rocket launchers that were preparing to deploy mines in the Strait of Hormuz. The reported action marks the first direct military strike against Iran in more than a month and has renewed concerns about the security of the key oil shipping route.

The move comes as the Federal Reserve maintains a cautious stance on inflation. Speaking at the Jackson Hole economic symposium on Friday, Fed Chair Kevin Warsh said inflation has not slowed significantly and indicated that policymakers still have more work to do before gaining confidence that price pressures are easing.

Against this backdrop, the renewed geopolitical tensions could add further pressure to energy prices and complicate the outlook for inflation and interest rates. WTI crude oil futures were last quoted at around $85 per barrel, up nearly 2%, while Brent crude gained more than 2% to trade near the $90-per-barrel mark.