Oil prices spiked more than 4% on Monday after Israel and Iran exchanged military strikes for the first time since the U.S.-brokered ceasefire took effect in April, threatening supply stability across the Middle East. Brent crude futures for August delivery rose 4.35% to $97.14 per barrel, while West Texas Intermediate crude for July gained 4.71% to $94.39 a barrel, as of data from Monday morning trading. The moves pushed Brent within striking distance of the psychologically important $100 mark for the first time since late 2025.
The escalation began Sunday when Iran launched missiles at Israeli positions, marking the first direct Iranian attack on Israel since the ceasefire. The Israeli Air Force responded by striking military targets in western and central Iran, according to the Israel Defense Forces. Iran’s Parliamentary Speaker, MB Ghalibaf, declared that U.S. and Israeli regional bases and assets are now “legitimate targets,” citing a U.S. naval blockade and alleged violations regarding Lebanon. The rhetoric has raised alarms about potential disruption to regional energy infrastructure and shipping lanes.
OPEC+ added another dimension to the oil calculus on Monday, announcing a production quota increase of 188,000 barrels per day starting in July. This marks the fourth straight monthly output hike since the reopening of the Strait of Hormuz to commercial shipping, though each increment has been modest. The June increase was similarly sized at 188,000 bpd, down from 206,000 bpd in April and May following the UAE’s exit from the organization. The cartel’s cautious approach reflects the delicate balance between accommodating higher prices and preventing demand destruction.
The combination of geopolitical risk and tightening supply fundamentals has pushed energy markets into a risk-on mode for producers. Energy analysts note that while the current ceasefire remains technically in place, any further tit-for-tat exchanges could threaten broader regional production infrastructure. U.S. President Donald Trump was briefed on the strikes and urged both sides to de-escalate, telling Fox News the attacks were “certainly not going to help negotiations.” An Iranian official told MS NOW that a deal with Trump is “no longer feasible at this stage,” suggesting the path to de-escalation remains uncertain and oil prices could stay elevated through the week.
