Oil prices jumped more than $4 on Monday as renewed violence in the Middle East rattled global energy markets, with investors reacting sharply to fresh Israeli strikes on Iran and continued attacks across Lebanon. The escalation has intensified concerns over regional stability and the security of key oil transit routes.
Brent crude futures climbed $4.42, or 4.47%, to $97.15 per barrel in early trading, while US West Texas Intermediate crude rose $4.07, or 4.50%, to $94.61 per barrel. The gains reversed losses seen at the end of last week, when markets briefly priced in hopes of a possible de-escalation.
The latest spike followed Israel’s confirmation that it had struck a petrochemical facility in southwestern Iran, alongside other military targets. The attack reportedly included damage to the Mahshahr petrochemical complex, marking the first reported hit on an Iranian energy site since a ceasefire agreement earlier in April. Iranian media cited local officials confirming damage to parts of the facility.
The strikes come despite reported calls from US President Donald Trump urging Israeli Prime Minister Benjamin Netanyahu to avoid further escalation. Instead, the conflict appears to be widening, with renewed missile exchanges between Iran and Israel following earlier violence linked to Lebanon.
Iran launched retaliatory missile attacks on Israeli targets after earlier strikes in Lebanon, where Iran-backed Hezbollah remains active. A fragile ceasefire agreed in early June between Israel and Lebanon is now under strain, further complicating diplomatic efforts to contain the conflict.
Market sentiment has been heavily influenced by fears over the Strait of Hormuz, a critical shipping lane through which nearly one-fifth of global oil and liquefied natural gas flows. Hopes for a reopening of stable energy transit routes are fading as tensions rise.
Oil prices have now climbed nearly 60% since the conflict escalated in late February, although they remain below March peaks when Brent crude briefly approached $120 per barrel.
Iran’s ambassador to Russia added to market uncertainty, stating that the Strait of Hormuz would remain open but under new conditions set jointly by Iran and Oman, potentially including transit fees. The comments have added another layer of unpredictability to already strained supply expectations.
Meanwhile, OPEC+ agreed to raise oil production for the fourth time in four months. However, analysts say the move is unlikely to ease supply pressures significantly, as several member countries are already struggling to meet output targets due to disruptions linked to the conflict and infrastructure constraints.
Market analysts warn that unless geopolitical tensions ease, oil prices are likely to remain highly volatile in the weeks ahead.
