Oil prices jumped more than four percent on Monday after Israel struck a petrochemical facility in Iran, fuelling concerns over energy supplies and dimming hopes for a swift end to the conflict that has rattled global markets.
Brent crude rose US$4.42, or 4.5 percent, to US$97.15 a barrel, while US benchmark West Texas Intermediate gained US$4.07, or 4.5 percent, to US$94.61 by 0609 GMT.
The gains reversed losses recorded on Friday when markets had briefly welcomed signs of possible de-escalation in the conflict involving Israel, Iran and Lebanon.
Israel said it had targeted the Mahshahr petrochemical complex in southwestern Iran, marking the first reported strike on an Iranian energy facility since an April 8 ceasefire. Iranian officials confirmed parts of the plant had been damaged.
The attack heightened fears of prolonged disruptions to energy exports through the Strait of Hormuz, a vital shipping route that normally carries about one-fifth of global oil and liquefied natural gas supplies.
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Prices have climbed nearly 60 percent since the conflict erupted in late February, although they remain below the almost $120-per-barrel levels reached in March.
Tensions escalated further after Iran launched missiles at Israeli targets on Sunday in retaliation for Israeli strikes in Lebanon.
Despite the violence, US President Donald Trump maintained that a broader peace agreement remained achievable. Iran has reportedly linked any deal with Washington to a lasting ceasefire in Lebanon.
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Meanwhile, Iran’s ambassador to Russia said the Strait of Hormuz would remain open but under new conditions, including transit fees to be determined by Iranian and Omani authorities.
The supply outlook was further clouded after OPEC+ agreed on Sunday to increase oil production for a fourth consecutive month.
However, analysts questioned the effectiveness of the move, arguing that many producers were unable to meet output targets because of disruptions linked to the Hormuz crisis and damage to Russian energy infrastructure.
“In the current market, the physical impact of such a decision would be close to zero,” said Jorge Leon, head of geopolitical analysis at Rystad Energy.
