Global oil prices surged on Monday as escalating tensions between the United States, Iran, and Israel heightened concerns over potential disruptions to energy supplies from the Middle East. The latest developments overshadowed weak economic data from China and pushed crude prices sharply higher.
U.S. West Texas Intermediate (WTI) crude futures climbed more than 2.6% to $89.65 per barrel, while Brent crude futures gained 2.25% to reach $93.17 per barrel. The rally followed a weekend exchange of strikes between the U.S. and Iran, alongside Israel’s decision to expand military operations in Lebanon against the Iran-backed Hezbollah group.
The United States said it carried out “self-defence strikes” on Iranian radar and drone control facilities in Goruk and Qeshm Island, claiming the action was a response to aggressive activities by Tehran. In response, Iran’s Islamic Revolutionary Guard Corps stated that it targeted an air base allegedly linked to a U.S. attack on a telecommunications facility on Sirik Island.
The renewed conflict has cast doubt on efforts to extend the ceasefire agreement between Washington and Tehran. U.S. President Donald Trump recently indicated that a decision on a proposed ceasefire extension could be announced soon, while negotiations continue over Iran’s nuclear programme and regional security issues. Hezbollah’s role remains a key factor in any broader agreement involving Israel and Iran.
Investors are also increasingly concerned about the Strait of Hormuz, a critical maritime route that handles nearly 20% of global oil and gas shipments. Reports suggesting additional mine deployments in the region have raised fears of prolonged supply disruptions, even if diplomatic progress is achieved.
Despite concerns about slowing demand, particularly in China and Europe, supply risks continue to dominate market sentiment. Analysts believe that any disruption in Middle Eastern energy exports could keep oil prices elevated, offsetting the impact of weaker global economic growth and lower fuel consumption forecasts.
