Oil crude prices surged around 5% Monday after Israel and Iran exchanged strikes, testing a fragile truce and threatening hopes for a deal to end the Middle East crisis.
The contract for August jumped 5.1% to $97.83 a barrel, while West Texas Intermediate (WTI) climbed 4.8% to hit $94.85.
Israel said on Monday it hit a petrochemical plant in Iran's southwest, along with strikes elsewhere on military targets. That's despite U.S. President Donald Trump reportedly telling Israeli Prime Minister Benjamin Netanyahu to refrain from further attacks.
In the first hit on an energy site inside Iran since the April 8 cease-fire, Israel said it struck targets at the Mahshahr petrochemical complex. A provincial official told Iran's semi-official Fars news agency that parts of the plant were damaged.
Hopes are now eroding for an imminent end to the wider war and a restart to crude flows through the Strait of Hormuz, through which roughly a fifth of the world’s oil and liquefied natural gas (LNG) used to transit.
Monday's gains erased Friday's losses, when prices fell on hopes of a de-escalation in the U.S.-Iran conflict. Oil prices have climbed just under 60% since the start of the war in late February, but remain below highs marked in March when Brent reached nearly $120 per barrel.
On Sunday, Iran fired a salvo of missiles at Israeli targets in retaliation for the strikes on Lebanon. Even so, Trump insisted that an agreement to end the wider war remains well within reach.
Iran has made a cease-fire with Lebanon a condition for a peace deal with Washington.
