Global oil prices climbed sharply on Monday as investors reacted to renewed military tensions in the Middle East, following fresh Israeli strikes on Iran and renewed hostilities involving Lebanon.
Brent crude futures rose by more than 4%, gaining $4.42 to trade at $97.15 per barrel, while US West Texas Intermediate crude increased by $4.07, or 4.5%, to $94.61 per barrel.
The price surge came after Israel announced it had carried out strikes on a petrochemical facility in southwestern Iran, as well as other military targets across the country. The attacks reportedly took place despite efforts by US President Donald Trump to discourage further military action.
Israeli officials said the operation targeted facilities within the Mahshahr petrochemical complex, marking the first reported strike on an energy-related site inside Iran since the ceasefire declared on April 8. Iranian authorities confirmed that parts of the facility had sustained damage.
The latest escalation has dampened hopes for a swift end to the broader regional conflict and raised concerns about the resumption of energy exports through the strategically important Strait of Hormuz.
The waterway, which historically carries around a fifth of the world's oil and liquefied natural gas shipments, has become a focal point of market anxiety amid ongoing disruptions.
Monday's gains reversed losses recorded at the end of last week, when oil prices fell on optimism that tensions between the United States and Iran could ease. Despite recent volatility, oil prices have risen nearly 60% since the conflict began in late February.
On Sunday, Iran launched a barrage of missiles at Israeli targets, describing the attack as retaliation for Israeli strikes in Lebanon. Nevertheless, President Trump maintained that a broader peace agreement remained achievable.
Iran has reportedly linked any future agreement with Washington to the continuation of a ceasefire arrangement involving Lebanon.
Meanwhile, Iran's ambassador to Russia, Kazem Jalali, indicated that the Strait of Hormuz would remain open but could operate under new conditions established jointly by Iran and Oman, including the possible introduction of transit fees.
His comments come as shipping through the strait remains severely disrupted, while US sanctions and restrictions continue to impact Iranian ports.
The supply concerns have further intensified pressure on global energy markets, although the OPEC+ alliance on Sunday agreed to increase oil production for the fourth time in four months.
Analysts, however, questioned whether the additional output would significantly ease supply constraints. Many OPEC+ members are struggling to meet production targets due to logistical challenges, disruptions linked to the Strait of Hormuz and, in Russia's case, infrastructure damage affecting output capacity.
Rystad Energy's head of geopolitical analysis, Jorge Leon, said the latest production increase was unlikely to have a meaningful impact on the market.
"In the current market, the physical impact of such a decision would be close to zero," Leon said.
With geopolitical tensions showing little sign of easing, energy markets are expected to remain highly volatile as investors closely monitor developments across the Middle East.