Oil prices settled about 1% higher on Monday as concerns over global energy supplies increased following additional strikes on Saudi Arabian energy infrastructure and continued attacks on shipping in the Middle East. Brent crude futures rose $1.07, or 1.0%, to settle at $105.68 per barrel, while U.S. West Texas Intermediate (WTI) crude gained $1.34, or 1.3%, to settle at $101.39 per barrel.

Both benchmarks rose nearly 5% earlier in the session before giving back much of their gains after President Trump said Iran wanted to reach a deal with Washington. The possibility of renewed diplomatic efforts helped ease some of the immediate supply concerns, although significant disruptions remain across the region.

Yemen’s Iran-backed Houthis launched another attack on Saudi Arabia, while planned talks between Gulf Arab states and Iran were postponed. The Houthis have also expanded their presence in Yemen, including capturing Perim Island at the mouth of the Red Sea.

A separate attack on Friday damaged Saudi Arabia’s East-West Pipeline, which provides an important alternative route for Gulf oil exports to bypass the Strait of Hormuz. The pipeline outage threatens additional disruptions to global oil supplies. With the pipeline out of service, the Red Sea port of Yanbu is relying on stored crude, which industry sources estimate could cover approximately five to seven days of exports.

Meanwhile, traffic through the Strait of Hormuz remains severely restricted. Preliminary ship-tracking data showed single-digit daily commodity vessel transits over the weekend, well below the 10-day average of approximately 14 vessels. Before the war began in late February, roughly one-fifth of the world’s oil supplies passed through the strait.

The energy-market impact is also being felt in refined products. Ukrainian attacks on Russian energy infrastructure last week helped push the U.S. national average diesel price above $6 per gallon, a record high. Any agreement to end the Russia-Ukraine war could allow Russia, the world’s third-largest crude oil producer in 2025, to increase energy exports and provide some additional supply to global markets.

Oil prices also faced pressure from expectations that the Federal Reserve could raise interest rates by a quarter percentage point on Wednesday. Higher interest rates can increase borrowing costs, slow economic growth and reduce demand for energy.