Oil prices rose sharply Monday on concerns of increasing supply disruptions after the U.S. and Israel launched a wave of attacks against Iran.
At 03:35 ET (08:35 GMT), Brent oil futures surged 9.6% higher to $79.78 a barrel, after earlier climbing to its highest level since January 2025, while West Texas Intermediate crude futures rose 8.8% to $72.95 a barrel, just below it highest level since June.
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U.S., Israel attack Iran The U.S. and Israel launched a wave of strikes against Iran over the weekend, killing hundreds, including Supreme Leader Ayatollah Khamenei and several top officials in the country.
Iran retaliated by launching missile strikes at Israel and several other Middle Eastern countries with U.S. ties, including Bahrain, Kuwait, Qatar, and the United Arab Emirates.
Iran was also seen attacking several ships passing through the Strait of Hormuz, likely heralding near-term disruptions in oil markets.
“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 is a key shipping channel for the oil industry, with roughly 20% of the world’s oil consumption passing through the waterway.
U.S. President Donald Trump said on Sunday evening that military action against Iran was set to continue in the coming days, while also warning that more American military personnel will likely be killed.
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The U.S. had in June 2025 struck Iran’s key nuclear facilities, with the goal of hampering the country’s nuclear ambitions.
Oil prices could remain elevated in the near term following the latest Middle East escalation.
"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+ hikes oil production Separately, the Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, agreed to hike production by 206,000 barrels per day at a Sunday meeting.
The production increase could offset some supply disruptions from the U.S.-Iran conflict, although it remained to be seen whether the group’s members will follow through with the hikes.
Shipping disruptions due to the U.S.-Iran conflict could also limit the overall effect of the supply increase.
Sunday’s hike is the OPEC’s first such move since late-2025, as the cartel seeks to raise production and regain a greater share of oil markets.
The OPEC had raised production by about 2.5 million barrels per day through 2025, and had announced a brief pause in its output hikes in November.
But crude prices trimmed their initial gains, as a weekend production hike from the Organization of Petroleum Exporting Countries stood to potentially limit overall supply shortages.
