Key facts
- Oil prices surged over 3% on Monday following U.S. and Iran exchanging strikes.
- Escalating conflict between Israel and Hezbollah in Lebanon also contributed to market jitters.
- U.S. crude futures (WTI) rose 3.3% to $90.24 per barrel.
- Brent crude futures increased by 3.05% to $93.9 per barrel.
- Concerns about potential disruptions in the Strait of Hormuz, a key oil shipping lane, are growing.
Global oil prices experienced a significant jump of over 3% on Monday, driven by retaliatory strikes between the United States and Iran, coupled with escalating tensions between Israel and Hezbollah in Lebanon. U.S. crude futures (WTI) climbed 3.3% to $90.24 a barrel, while international benchmark Brent crude futures rose 3.05% to $93.9 a barrel.
The U.S. reported conducting "self-defence strikes" on Iranian radar and drone control sites over the weekend, which it stated was a response to "aggressive" actions by Tehran. In turn, Iran's Islamic Revolutionary Guard Corps announced its aerospace force had targeted an air base used in what it described as a U.S. attack on a telecoms tower.
Adding to market concerns, Israel ordered troops to move further into Lebanon amid its ongoing battle with Tehran-backed Hezbollah. These developments have dimmed hopes for an imminent extension of a ceasefire, which had previously contributed to a dip in oil prices on Friday.
Analysts highlighted growing concerns over potential mine-laying in the Strait of Hormuz, a critical chokepoint for global oil and gas flows, accounting for approximately a fifth of such trade. IG analyst Tony Sycamore noted that any disruption or slow reopening of the waterway could delay relief for the oil market.
Concerns over supply disruptions in the Middle East appeared to outweigh recent economic data from China, which indicated stalling factory activity and a potential loss of momentum in the world's second-largest economy.