Oil prices surged over 3% on Monday, with Brent crude rising above $80 per barrel for the first time since August, as escalating tensions in the Middle East spurred investor concerns over potential disruptions to oil supplies. Brent crude futures closed at $80.93 per barrel, up $2.88 or 3.7%, while U.S. West Texas Intermediate (WTI) gained $2.76, or 3.7%, to settle at $77.14 per barrel. The sharp increase follows last week’s strong gains, with Brent rising over 8% and WTI up more than 9% after Iran’s missile attack on Israel heightened fears of retaliatory strikes on Iran’s oil infrastructure. Analysts predict that such an escalation could push prices up by an additional $3 to $5 per barrel. Further intensifying concerns, rockets fired by Hezbollah struck Haifa, Israel’s third-largest city, as Israel prepared to expand its ground operations into southern Lebanon. Analysts from Tudor, Pickering, Holt & Co warned that growing conflict could endanger Iran’s daily production of 3.4 million barrels of oil and lead to wider regional supply disruptions.
John Kilduff, a partner at Again Capital, emphasized that if Israel does not target Iranian oil infrastructure, oil prices could drop by $5 to $7 per barrel. Brent Belote, founder of Cayler Capital, also highlighted that demand remains weak, and OPEC+—which includes Russia—has spare capacity that could offset potential supply disruptions from Iran. OPEC+ is set to increase production from December after cutting output in recent years due to sluggish global demand.