Oil prices rose during Monday’s trading after a sharp weekly selloff, as geopolitical tensions in the Middle East returned to the center of market attention. The gains were supported by renewed clashes between the United States and Iran over the weekend, along with Israel’s deeper move into southern Lebanon, which revived concerns over supply security and shipping activity in the region.
Brent crude futures for August delivery rose 2.8% to $93.63 per barrel, while West Texas Intermediate crude advanced 3.1% to $90.05 per barrel. This rebound came after both benchmarks suffered weekly losses of nearly 10%, one of their steepest declines in recent weeks, after reports of talks between Washington and Tehran over a possible ceasefire framework had raised expectations of lower risks around the Strait of Hormuz.
However, the picture shifted quickly after the U.S. military announced strikes on Iranian military sites, including air defense systems, drone command centers, and related infrastructure. The move came after accusations that Tehran had downed a U.S. drone over international waters. Iran’s Revolutionary Guards responded by targeting an air base used by U.S. forces, while Kuwaiti air defenses said they intercepted missile and drone attacks, highlighting the fragile security backdrop in the Gulf.
These developments came alongside clear signs of stalled ceasefire talks between the United States and Iran, with no strong indications so far that a lasting agreement is close. Although U.S. President Donald Trump said Iran remained interested in reaching a deal, key files including regional security, sanctions, and freedom of navigation continue to stand in the way of any near term settlement.
In Lebanon, Israel pushed its forces deeper into the south, escalating operations against Iran backed Hezbollah despite previous efforts to contain the conflict. This move brought back concerns that the fighting could widen across the region and threaten energy infrastructure or key shipping routes.
The Strait of Hormuz remains a central factor in oil market calculations, given its role as one of the world’s most important energy corridors and a major route for crude shipments. With political and security uncertainty still high, traders remain alert to any further disruption that could affect supply flows.
Oil markets have seen sharp swings in recent weeks, with prices reacting directly to conflicting headlines between military escalation and diplomatic efforts. Although prices fell on Friday after reports pointed to possible progress between Washington and Tehran, the continued weakness in shipping activity through the Strait of Hormuz shows that supply concerns have not left the market yet.
European stocks began the week on a subdued note, trending slightly lower, as renewed tensions between the United States and Iran weighed on investor sentiment following a fresh exchange of fire, diminishing hopes for a near-term agreement. This market caution coincided with rising bond yields across the eurozone, amid expectations that the European Central Bank may be forced to adopt a more hawkish stance if energy prices continue to climb.
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