100 days of Middle East crisis: Oil prices jump over 3% as Iran-Israel resume war

Oil prices jumped on Monday as tensions in the Middle East flared up once again, raising fresh concerns over global oil supplies. Global crude benchmarks gained more than 3% as the crisis entered has now crossed 100 days, with peace efforts continuing to yield little progress.

As of 7:50 am, WTI crude was trading at $93.87 per barrel, up $3.33 or 3.68%, while Brent crude rose $3.27, or 3.51%, to $96.36 per barrel.

The gains reversed most of last week’s losses, when oil prices had declined amid expectations of a de-escalation in tensions between the United States and Iran.

The latest escalation began with Iranian missile strikes on Israel, prompting a retaliatory response from Israel. The Israeli Air Force said it carried out strikes on military targets linked to the Iranian regime in western and central Iran, adding that the operation was guided by Military Intelligence.

Market sentiment shifted further after Israel launched renewed attacks on Lebanon on Sunday despite an existing truce between the two countries. The latest flare-up dealt a blow to hopes of securing a peace agreement between Washington and Tehran and reopening the Strait of Hormuz, a key route for global oil and gas shipments.

Iran has linked any peace agreement with the United States to a ceasefire involving Lebanon. Following the strikes in Beirut, Iran responded by firing missiles at Israel in support of its ally Hezbollah.

Israel entered Lebanon in March after Hezbollah, backed by Iran, launched rockets and drones across the border.

On June 3, Lebanon and Israel announced that they had agreed to a ceasefire following negotiations in Washington. The two sides had also reached an earlier agreement to halt hostilities in April, although violence continued afterwards.

The wider conflict has remained largely on pause since the US and Israel suspended attacks on Iran in early April. However, Tehran has continued to block most shipping through the Strait of Hormuz, contributing to an ongoing supply crisis.

Meanwhile, OPEC+ on Sunday approved its fourth oil output increase in four months. Analysts said the move was unlikely to significantly ease supply concerns because many members are unable to meet production targets due to the Strait of Hormuz closure. Russia has also faced production challenges as infrastructure attacks have reduced its output capacity.

According to an OPEC statement, the group agreed to raise production targets by 188,000 barrels per day from July. The increase matches June's rise, which had already been reduced from the monthly increases of 206,000 barrels per day approved in April and May following the United Arab Emirates' departure from the organisation.

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