Oil prices surged on Monday, climbing more than $4 a barrel as escalating military tensions involving Israel, Iran and Lebanon raised fresh concerns about global energy supplies and diminished hopes for a near-term easing of the conflict.
Brent crude futures gained $4.42, or 4.47%, to reach $97.15 a barrel by 0609 GMT. U.S. West Texas Intermediate crude futures rose $4.07, or 4.50%, to $94.61 a barrel.
Strike on Iranian petrochemical facility rattles energy markets
Investor concerns intensified after Israel confirmed attacks on military targets across Iran, including a strike on a petrochemical complex in the country’s southwest. The operation came despite reports that U.S. President Donald Trump had urged Israeli Prime Minister Benjamin Netanyahu to avoid further military action.
Israel said it had targeted facilities within the Mahshahr petrochemical complex, marking the first reported attack on Iranian energy infrastructure since the ceasefire agreed on April 8. Iranian officials later acknowledged that sections of the facility had been damaged.
The renewed hostilities have undermined expectations that the broader conflict could soon be resolved and have reduced optimism that oil shipments through the Strait of Hormuz will resume in the near future. Prior to the war, around 20% of global oil and liquefied natural gas trade passed through the strategic waterway.
Crude prices rebound sharply after Friday’s decline
Monday’s advance reversed the losses seen on Friday, when oil markets weakened on expectations that tensions between Washington and Tehran could ease.
Even after recent fluctuations, crude prices remain almost 60% higher than they were before the conflict erupted in late February. However, they are still below the peaks reached in March, when Brent crude briefly traded close to $120 a barrel.
Iran launched a fresh barrage of missiles against Israeli targets on Sunday in response to Israeli operations in Lebanon. Nevertheless, President Trump continued to express confidence that a wider peace agreement remains achievable.
Tehran has repeatedly maintained that any broader deal with the United States must include a lasting ceasefire in Lebanon.
Israel began military operations in Lebanon in March following rocket and drone attacks carried out by the Iran-backed Hezbollah movement. On June 3, Israel and Lebanon announced a ceasefire agreement following negotiations held in Washington.
Tehran signals Hormuz reopening could come with new restrictions
Markets were also closely watching comments from Iran’s ambassador to Russia, who suggested the Strait of Hormuz could reopen but under revised terms.
“Of course, this strait will be open, but with new conditions to be determined by the Iranian and Omani authorities,” Ambassador Kazem Jalali told Russian newspaper Izvestia in an interview published on Monday.
Iran maintains that shipping traffic through the Strait of Hormuz remains heavily restricted, while U.S. sanctions and maritime measures against Iranian ports continue to affect regional trade flows.
Analysts question effectiveness of latest OPEC+ production increase
Meanwhile, OPEC+ agreed on Sunday to raise oil production for a fourth consecutive time in four months in an effort to ease supply pressures.
Despite the announcement, analysts believe the move will do little to increase actual supply. Several member countries remain unable to meet production targets due to logistical and operational constraints. The closure of the Strait of Hormuz continues to disrupt exports, while Russia’s output capacity has been affected by attacks on key infrastructure.
“In the current market, the physical impact of such a decision would be close to zero,” Rystad Energy’s head of geopolitical analysis, Jorge Leon, said in a note to clients.
With geopolitical tensions showing little sign of easing and major energy supply routes still under pressure, traders are continuing to brace for heightened volatility across global oil markets.
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