Key facts
- Oil prices settled higher after Iran and Israel announced they had halted attacks on each other.
- Prices had previously risen more than 5% amid renewed Israeli strikes on Iran and attacks on Lebanon.
- Brent crude futures closed $1.16 higher at $94.25 a barrel, and WTI crude futures rose 76 cents to $91.30.
- Israel struck a petrochemical plant in southwestern Iran, while Iran's IRGC claimed retaliation against an Israeli facility.
- Iran warned of harsher attacks if Israel continues strikes on Lebanon.
- OPEC+ agreed to its fourth oil output target increase in four months on Sunday.
- The Houthis announced a ban on ships linked to Israel from the Red Sea.
Oil prices settled $1 higher on Monday after Iran announced its initial wave of attacks on Israel had concluded, though Tehran warned of further action if Israel continued to strike Hezbollah in Lebanon. Earlier in the session, prices had surged more than 5% due to renewed Israeli strikes on Iran and attacks on Lebanon, which had diminished hopes for an immediate end to the wider conflict.
Brent crude futures closed $1.16, or 1.3%, higher at $94.25 a barrel, while U.S. West Texas Intermediate crude futures were up 76 cents, or 0.8%, at $91.30. Israel reported hitting a petrochemical plant in southwestern Iran used for ballistic missiles, while Iran's Islamic Revolutionary Guard Corps stated it retaliated against a similar Israeli facility. These exchanges followed Israeli strikes on strongholds of Iran-backed Hezbollah in Beirut over the weekend.
Analysts noted concerns that flows through the Strait of Hormuz, a critical chokepoint for global oil and LNG supply, might remain restricted. Iran's ambassador to Moscow suggested the strait would remain open under conditions set by Iran and Oman, potentially including transit fees. U.S. President Donald Trump urged both Israel and Iran to cease hostilities.
In response to the supply crisis, OPEC+ agreed on Sunday to its fourth oil output target increase in four months. Analysts suggested this decision would have minimal impact as most members are unable to meet their targets due to factors like Strait of Hormuz closures or Ukrainian drone attacks on Russian production capacity. The Houthis also announced a ban on ships linked to Israel from the Red Sea.