Oil Surges Above $97 as Iran-Israel Escalation Threatens Ceasefire Efforts and Supply Routes

Brent crude futures climbed more than 4% on Monday, surpassing $97 per barrel, as renewed military exchanges between Iran and Israel heightened concerns over global energy supplies and regional stability.

The rally follows two consecutive sessions of losses and comes after both countries reportedly exchanged missile strikes, raising doubts about the viability of a proposed 60-day ceasefire initiative backed by U.S. President Donald Trump. The temporary truce is intended to create a framework for broader negotiations aimed at reaching a permanent resolution to the conflict.

Despite the renewed hostilities, Trump urged both sides to avoid further military escalation and emphasized that diplomatic discussions remain ongoing.

Oil markets also continued to react to disruptions affecting energy flows from the Persian Gulf. The prolonged conflict and the continued near-closure of the Strait of Hormuz—a critical shipping route for global crude exports—have reinforced concerns about potential supply shortages, providing additional support for crude prices.

The Strait of Hormuz handles a significant share of the world’s seaborne oil trade, making any disruption a key driver of volatility across energy markets.

Separately, the OPEC+ alliance approved another increase in oil production quotas for July, authorizing an additional 188,000 barrels per day. The decision reflects the group’s effort to balance market stability and demand expectations despite persistent geopolitical risks across the Middle East.