Oil prices closed higher on Monday, with Brent on track for a record monthly gain and U.S. crude futures settling above $100 per barrel for the first time since 2022, as escalating tensions in the Middle East added fresh supply risk. Brent crude edged up 21 cents, or 0.2%, to settle at $112.78 per barrel after earlier rising more than $4 intraday to $116.89. U.S. West Texas Intermediate (WTI) gained $3.24, or 3.3%, to settle at $102.88, its highest level since July 2022.
The conflict has broadened across the region following additional attacks involving Iran-aligned forces, raising concerns over key shipping routes around the Arabian Peninsula and the Red Sea. While Red Sea flows have not yet been directly targeted, the risk of disruption to this corridor—which accounts for a significant share of global maritime trade—remains a key upside driver for prices. Any closure of the southern Red Sea access point could add an estimated $5–$10 per barrel to crude.
Iran’s effective closure of the Strait of Hormuz—through which roughly 20% of global oil and gas supply transits—has been a central factor behind the surge in prices. Crude benchmarks have risen sharply this month, with Brent up approximately 57% and WTI gaining around 53%, marking one of the strongest monthly rallies on record.
Despite ongoing geopolitical tensions, some signs suggest partial flows are continuing through the region, helping to temper immediate supply concerns at the margin. However, the market remains highly sensitive to further escalation, particularly given continued threats to energy infrastructure and shipping lanes.
Recent U.S. policy signals, including an extended deadline for potential action against Iranian energy assets, have provided limited reassurance to markets. Participants continue to look for concrete signs of de-escalation rather than political rhetoric.
Meanwhile, global producers are adjusting flows in response to disruptions. Saudi Arabia has significantly increased crude shipments via Red Sea routes, while Nigeria is expected to modestly boost exports in the coming months. At the same time, recent attacks on energy infrastructure in parts of the Middle East have reinforced concerns about broader regional supply risks.
In the U.S., early expectations point to a modest draw in crude inventories last week, alongside declines in refined product stocks, indicating continued underlying demand strength.