Oil prices extended gains on Monday amid escalating geopolitical tensions in the Middle East, including stalled efforts to end the Iran conflict, reported drone activity near Gulf energy infrastructure, and renewed signals that the United States may consider military options against Iran.
Brent crude futures rose by $2.01, or 1.84%, to $111.27 per barrel by 0432 GMT, after briefly touching $112, its highest level since early May. US West Texas Intermediate (WTI) crude increased by $2.33, or 2.21%, to $107.75 per barrel, after reaching $108.70, the highest since late April. The front-month June WTI contract is set to expire on Tuesday.
Both benchmarks had already gained more than 7% in the previous week, driven by concerns over supply disruptions linked to attacks on shipping routes in the Strait of Hormuz and broader regional instability.
Market sentiment was further pressured by reports of drone strikes targeting infrastructure in the Gulf region, including an incident near the Barakah Nuclear Power Plant. Emirati authorities said they were investigating the source of the attack and warned of their right to respond to what they described as hostile actions. No damage or radiation impact was reported.
Saudi Arabia also reported intercepting drones entering its airspace from the direction of Iraq and said it would take operational measures to defend its sovereignty and security.
Analysts said the renewed incidents have intensified concerns that energy infrastructure across the Gulf could become a target if the conflict expands, adding further risk premiums to global oil markets.
Geopolitical uncertainty was further heightened by reports that senior US national security officials are expected to review potential military options related to Iran. At the same time, diplomatic progress remains stalled, with no breakthrough in efforts to de-escalate tensions or restore stability in maritime trade routes.
Additional upward pressure on oil prices came after the lapse of a US sanctions waiver that previously allowed select countries to import Russian seaborne crude, tightening expectations around global supply flows.
Market experts noted that fears of renewed escalation, combined with reduced supply flexibility, continue to support crude prices as traders factor in higher geopolitical risk premiums.