Oil prices surged on Monday, with Brent crude futures jumping $2.43 or 2.16% to $115 a barrel by 0342 GMT after Yemeni Houthis launched their first attacks on Israel over the weekend. This development widened the US-Israel war with Iran in the Middle East.
US West Texas Intermediate was at $101.50 a barrel, up $1.86, or 1.87%, following a 5.5% gain in the previous session.
The market has largely discounted the prospect of a negotiated end to the war, despite Trump’s claims of ongoing ‘direct and indirect’ talks with Iran, according to Vandana Hari, founder of oil market analysis provider Vanda Insights.
Brent has soared 59% this month, the steepest monthly jump, exceeding gains seen during the 1990 Gulf War after the Iran conflict effectively closed the Strait of Hormuz, a conduit for a fifth of the world’s oil and gas supplies.
The war, launched on February 28 with US and Israeli strikes on Iran, has spread across the Middle East. The conflict is no longer concentrated in the Persian Gulf and around the Strait of Hormuz but now extends into the Red Sea and the Bab El Mandeb — one of the world’s most crucial chokepoints for crude and refined product flows.
Saudi crude exports redirected from the Strait of Hormuz to the Yanbu port in the Red Sea reached 4.658 million barrels per day last week, data from analytics firm Kpler showed. If exports from Yanbu were disrupted, Saudi oil would need to pivot toward Egypt’s Suez-Mediterranean (SUMED) pipeline to the Mediterranean.
Iran said it was ready to respond to a US ground attack, accusing Washington of preparing a land assault even as it sought negotiations.