Oil prices gained ground in Asian trading on Monday, continuing a recent upward trend fueled by rising fears of supply interruptions amid escalating hostilities between Israel and Iran in the Middle East.
Despite the gains, prices remained below the 4½-month peak reached on Friday, following Israel’s initial strikes against Iranian targets. Tehran responded over the weekend with missile attacks on Israeli cities.
By 21:01 ET (01:01 GMT), Brent crude futures for August delivery had risen 0.5% to $74.59 per barrel, while West Texas Intermediate (WTI) crude climbed 0.6% to $71.66 per barrel.
Conflict Intensifies; U.S. Role Under Scrutiny
The weekend saw a rapid exchange of strikes between Israel and Iran, with both sides showing little willingness to de-escalate. Israel’s Friday attacks included strikes on Iran’s nuclear facilities, prompting retaliatory missile launches targeting major urban centers in Israel, including Tel Aviv.
The flare-up has heightened expectations of tougher sanctions on Iranian oil exports and raised concerns about potential disruptions in the Strait of Hormuz—a critical shipping route for oil shipments to Asia and Europe.
Attention is now turning to the potential for U.S. involvement. President Donald Trump indicated ongoing efforts toward a ceasefire but suggested the two nations might need to “fight it out” before any resolution is reached. He also issued warnings to Iran against targeting American assets in the region.
The conflict caused Iran to pull out of nuclear negotiations with the U.S., which were slated for the weekend.
Central Banks in Focus Amid Geopolitical Risks
While the Middle East tensions are dominating near-term oil market dynamics, the week also features a series of key central bank meetings globally.
The Bank of Japan will announce its decision on Tuesday, expected to hold interest rates steady, with investors watching closely for any new economic guidance.
The U.S. Federal Reserve is set to maintain current rates on Wednesday, with market participants eager to hear if the Fed signals further rate cuts amid signs of easing inflation and a slowing economy.
Later in the week, China’s central bank will set its benchmark lending rate, while the Swiss National Bank and Bank of England also prepare to announce their monetary policy decisions.
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