Oil prices jumped in Asian trade on Monday after Iran fired missiles at Israel for the first time since a fragile ceasefire was agreed between the countries and the US in April, according to a report by Osmond Chia for BBC News. The global benchmark Brent crude rose by 2.6% to $95.50 (£71.60) a barrel, while US-traded West Texas Intermediate (WTI) crude rose by 2.5% to $92.75.
Geopolitical Trigger and Ceasefire Strain
The missile strikes come after a ceasefire agreement that has been in force since 17 April, which, according to BBC News, has been violated repeatedly by both Israel and Iran. US President Donald Trump told news outlet Axios that he will urge Israel "not to retaliate," despite the country's military saying it will "strike the enemy" as soon as the order is given. Trump was quoted as saying: "I am going to call Bibi right now and tell him not to retaliate." He added, "We are very close to a final deal with Iran. It is going to be a good deal. I don't want it to blow up because of what is happening now."
| Benchmark | Pre-Move Price (Approx.) | Move | New Price |
|---|---|---|---|
| Brent Crude | ~$93.08 (implied) | +2.6% | $95.50/barrel |
| WTI Crude | ~$90.49 (implied) | +2.5% | $92.75/barrel |
Supply Risk from Strait of Hormuz
The war has disrupted the flow of oil and gas shipments from the Gulf after Iran threatened to strike vessels that try to cross the critical Strait of Hormuz trade route in retaliation for the US-Israeli attacks, BBC News reported. The Strait is a vital chokepoint through which about a fifth of the world's oil passes. Any further escalation could threaten supply flows, adding a significant risk premium to crude prices.
Market Uncertainty Ahead
Oil prices have surged since the US and Israel launched strikes on Iran on 28 February and have continued to make huge swings throughout the subsequent ceasefire. According to BBC News, prices have hovered around the $95 mark in the past week as traders weigh the conflict's long-term impact on global energy flows. The latest missile strikes inject fresh uncertainty, with traders monitoring whether Israel heeds Trump's call for restraint or retaliates, potentially unraveling the ceasefire entirely.
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