Oil futures rose in Asian trading on Monday amid renewed clashes between Israel and the Iranian-backed Hezbollah group in Lebanon, reviving concerns over supply risks in the Middle East.
Price moves - As of 19:49 ET (23:49 GMT), Brent crude futures for August delivery were up 2.1% at $92.99 per barrel, while West Texas Intermediate (WTI) crude futures also gained 2.1% to trade at $89.20 per barrel.
The gains followed steep weekly declines for both contracts. Each contract fell roughly 10% over the prior week - their sharpest weekly drops in several weeks - after reports emerged that Washington and Tehran were discussing a possible ceasefire framework that could ease disruptions around the Strait of Hormuz.
Market momentum shifted over the weekend, however, when Israeli forces ordered troops to advance deeper into southern Lebanon. That move intensified Israel's campaign against Hezbollah despite earlier ceasefire efforts and raised the prospect that the fighting could widen across the region or endanger energy infrastructure and shipping lanes.
At the same time, talks toward a more permanent truce between the U.S. and Iran appeared to have stalled. Iranian officials indicated that significant issues remained unresolved, and reports noted any extension of a ceasefire agreement would still require approval from U.S. President Donald Trump. The lack of clarity around those negotiations contributed to trader caution.
Traders remain particularly watchful of flows through the Strait of Hormuz, a key maritime choke point that handles roughly a fifth of global oil shipments. Observers noted that, while prices had fallen on Friday amid reports of progress toward a U.S.-Iran understanding, shipping activity through Hormuz remained below normal levels and supply concerns had not been fully eliminated.
Oil markets have experienced sharp swings recently as participants reacted to a mix of military developments and diplomatic headlines. The combination of heightened regional military activity and uncertainty about diplomatic progress left market participants jittery about the prospect of further interruptions to oil flows.
Key context provided in this report:
- Brent and WTI each rose 2.1% to $92.99 and $89.20 per barrel, respectively, as of 19:49 ET (23:49 GMT).
- Both contracts had posted weekly drops of about 10% prior to Monday's gains, their largest weekly declines in several weeks.
- Renewed military action in southern Lebanon and stalled U.S.-Iran truce talks contributed to elevated market uncertainty.