Oil prices rose sharply on Monday as supply disruptions tied to the expanding U.S.–Israeli war with Iran and production cuts from Saudi Arabia and other OPEC producers tightened global markets. Brent crude futures settled at $98.96 per barrel, up $6.27, or 6.8%, while U.S. West Texas Intermediate (WTI) crude settled at $94.77, up $3.87, or 4.3%. During the session, prices surged as much as 29%, with Brent reaching an intraday high of $119.50 and WTI touching $119.48, the highest levels for both benchmarks since June 2022.
The rally was driven largely by supply disruptions after the conflict effectively shut the Strait of Hormuz, a key shipping lane through which roughly 20% of global oil and LNG supplies normally pass. Saudi Arabia, the United Arab Emirates, Iraq, Kuwait, and Qatar have reduced production as exports remain constrained and storage capacity tightens.
Saudi Aramco has begun cutting output at two oilfields while offering more than 4 million barrels of crude through rare tenders to help offset export disruptions. Even if the strait reopens soon, analysts estimate it could take six to seven weeks for Gulf exports to return to normal levels.
Despite the strong settlement, prices reversed direction after the close. Markets fell in post-settlement trading following news of a call between U.S. President Donald Trump and Russian President Vladimir Putin, along with reports that the Trump administration may consider easing sanctions on Russian oil to help stabilize global energy prices.
Additional pressure came from speculation that the United States and other Group of Seven (G7) nations could release crude from strategic petroleum reserves to help ease supply concerns. Analysts also pointed to profit-taking and concerns that sharply higher energy prices could fuel inflation and slow economic growth.
Even after the late-session pullback, both Brent and WTI remain more than 35% higher since the conflict with Iran began, highlighting the market’s sensitivity to ongoing supply risks in the Middle East.