Highlights:
- WTI crude rallies more than 4% to $94.40 per barrel.
- Brent crude rises above $96, gaining nearly 4%.
- Israel launches fresh strikes on Lebanon despite ceasefire.
- Concerns grow over disruptions in the Strait of Hormuz.
- Iran responds with missile attacks targeting Israel.
- Hopes for a US-Iran diplomatic breakthrough weaken.
- OPEC approves additional oil output increase for July.
- Energy markets react to rising geopolitical uncertainty.
Global crude oil prices surged sharply on Monday after renewed military tensions in the Middle East reignited concerns about energy supply disruptions. The latest escalation came after Israel launched fresh strikes on Lebanon despite a ceasefire agreement reached earlier this month, triggering fears that the broader regional conflict could intensify.
US West Texas Intermediate (WTI) crude futures climbed 4.26% to $94.40 per barrel, while Brent crude futures gained 3.82% to trade at $96.65 a barrel. The rally reflects growing anxiety among investors over the security of oil shipments through the Strait of Hormuz, one of the world’s most important energy transit routes.
Market sentiment deteriorated after hopes of a diplomatic resolution between the United States and Iran weakened. Analysts noted that any delay in restoring normal shipping operations through the Strait of Hormuz could tighten global oil supplies and keep prices elevated in the coming weeks.
The renewed conflict follows Israeli strikes in Lebanon that reportedly targeted positions linked to Hezbollah, a key ally of Iran. In response, Iran launched missile attacks against Israel, raising concerns that the confrontation could spread across the region. The exchange of hostilities has significantly reduced expectations of a near-term easing of geopolitical tensions.
Reports indicate that Iran had linked progress in its diplomatic engagement with Washington to a lasting ceasefire in Lebanon. However, continued military action has complicated those efforts and increased uncertainty in energy markets.
Adding to the complexity, US President Donald Trump stated that he would encourage Israeli Prime Minister Benjamin Netanyahu to avoid retaliatory measures against Iran. Despite diplomatic efforts, investors remain cautious as developments continue to unfold.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) agreed to increase oil production quotas by 188,000 barrels per day for July. While the additional supply may help stabilize markets, traders believe geopolitical risks currently outweigh the impact of higher production.
With tensions showing little sign of easing, analysts expect crude oil prices to remain volatile. Market participants will closely monitor developments in the Middle East, particularly around the Strait of Hormuz, which remains a critical artery for global energy supplies.
