Oil prices climbed sharply on Monday amid growing fears of supply disruptions after the United States and Israel carried out a series of military strikes against Iran.
As of 03:35 ET (08:35 GMT), Brent crude futures had surged 9.6% to $79.78 per barrel after earlier touching their highest level since January 2025. West Texas Intermediate (WTI) crude futures rose 8.8% to $72.95 per barrel, hovering just below their strongest level since June.
U.S. and Israel launch attacks on Iran
Over the weekend, U.S. and Israeli forces conducted coordinated strikes across Iran, reportedly killing hundreds of people, including Supreme Leader Ayatollah Khamenei and several senior officials.
Iran responded with missile attacks targeting Israel and multiple Middle Eastern nations linked to the United States, including Bahrain, Kuwait, Qatar and the United Arab Emirates.
Tehran was also reported to have targeted vessels moving through the Strait of Hormuz, signalling the potential for near-term disruption to global oil supplies.
“With the retaliatory action now evolving to attacks on oil tankers in the Strait of Hormuz, the threat on oil supplies has substantially risen,” ANZ analysts said in a note.
The Strait of Hormuz remains one of the most critical energy transit routes globally, carrying roughly one-fifth of total worldwide oil consumption.
U.S. President Donald Trump said Sunday evening that military operations against Iran would continue in the coming days and warned that additional American casualties were likely.
The latest strikes represent the second major U.S. military operation against Iran since mid-2025, with Tehran’s nuclear enrichment programme remaining a central source of tension between Washington and Tehran. The escalation follows the collapse of recent negotiations between the two countries, which ended without an agreement.
In June 2025, the United States had already targeted key Iranian nuclear facilities in an effort to slow the country’s nuclear development efforts.
Analysts expect oil prices to remain elevated in the near term following the renewed escalation in the Middle East.
“We expect a potential price spike of up to $80/bbl over the next week due to the initial and continued U.S. and Israeli combat operations against Iran,” analysts at Texas Capital, led by Derrick Whitfield said in a note on Sunday.
OPEC+ agrees production increase
Separately, the Organization of the Petroleum Exporting Countries and its allies — collectively known as OPEC+ — agreed during a Sunday meeting to raise output by 206,000 barrels per day.
The additional supply could help offset part of the disruption linked to the U.S.-Iran conflict, although uncertainty remains over whether member countries will fully implement the planned increases.
At the same time, shipping disruptions tied to the conflict could limit the effectiveness of the production boost.
Sunday’s decision marks OPEC’s first output increase since late 2025, as the group aims to expand production and reclaim market share.
OPEC had already increased output by roughly 2.5 million barrels per day throughout 2025 before announcing a temporary pause in production hikes in November.
Oil prices later pared some of their early gains, as the weekend production increase raised expectations that additional supply could partially ease potential shortages.