Oil prices continued their upward momentum on Monday, reversing earlier losses, as intensifying hostilities between Israel and Iran reignited fears over supply disruptions in the Middle East.
Brent crude, the international benchmark, rose by 0.25% to $73.86 per barrel, up from $73.67 at the close of the previous session. Similarly, West Texas Intermediate (WTI), the U.S. benchmark, climbed 0.54% to $71.99 per barrel from $71.60.
The gains come on the heels of a five-month high reached on Friday after Israel launched large-scale attacks targeting nuclear sites and military installations across multiple Iranian cities. Iran responded with ballistic missile strikes, escalating the geopolitical standoff in the oil-rich region.
With neither side showing signs of de-escalation over the weekend, fears of a broader conflict have grown, raising the prospect of supply disruptions—particularly through the Strait of Hormuz, a strategic chokepoint through which a significant share of the world’s oil passes.
According to Daniel Hynes, senior commodity strategist at Australia and New Zealand Banking Group, Israeli strikes hit a natural gas facility linked to Iran’s South Pars field and the Shahran fuel and gasoline depot. In retaliation, Iranian missiles damaged Israel’s Bazan oil refinery and associated pipelines.
“While these facilities may not significantly impact global oil supply in the short term, the scale and nature of the attacks mark a departure from previous tit-for-tat exchanges,” Hynes noted.
Meanwhile, U.S. President Donald Trump struck a cautiously optimistic tone, suggesting a diplomatic resolution might still be possible despite ongoing military confrontations.
“There’s a good chance there will be a deal,” Trump told reporters on Sunday. “I hope there is going to be a deal. Sometimes they have to fight it out first.”
In a later briefing before departing for the G7 summit in Canada, Trump reiterated, “I think it’s time for a deal, and we’ll see what happens,” while denying any U.S. involvement in the Israeli strikes. “The U.S. had nothing to do with the attack on Iran tonight,” he posted on Truth Social, warning of massive retaliation if Iran were to target American interests.
Investors are also watching for the release of OPEC’s Monthly Oil Market Report later in the day, which could provide further insight into supply dynamics and market outlook.
