Oil rises nearly 4% on renewed Middle East conflict

The price of crude oil rose almost 4 percent on Monday morning after Israel and Iran renewed attacks, jeopardising the possibility of a peace deal and the reopening of the Strait of Hormuz.

US crude futures (WTI) increased 3.6 percent to $93.83 a barrel as of 03:40 GMT. Brent futures gained 3.7 percent to reach $96.55 a barrel.

Israel confirmed strikes on military targets in western and central Iran early on Monday, with Tehran firing missiles at Israeli targets in retaliation.

In an interview with the Financial Times after the strikes, US president Donald Trump said Israeli prime minister Benjamin Netanyahu will have no choice but to accept any deal the US negotiates with Iran.

“I call the shots. I call all the shots. He [Netanyahu] doesn’t call the shots,” he said.

On Sunday, Israel renewed strikes on Lebanon, according to Reuters, despite a truce between the two countries last week.

Meanwhile, Opec+ on Sunday agreed to its fourth increase in oil output in four months, increasing production by 188,000 barrels per day (bpd) from July, the oil group said in a statement.

Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman met virtually on Sunday to review global market conditions and outlook.

Further reading:

• Hormuz closure threatens Gulf’s AI goals, warns OECD
• US sanctions target Iran’s Hormuz transit authority
• Hormuz crisis fuels Libya oil comeback

In April, the UAE announced it was leaving Opec and Opec+ following a comprehensive review of its production policy and current and future capacity.

The UAE has previously said it wants to increase production from 3.4 million bpd to 5 million by 2027. Coordinated cuts and quotas by Opec+ members have capped production for years in a bid to raise oil prices.

Gold prices continued to decline on Monday amid the growing tensions in the Middle East.

Spot gold fell 0.6 percent to $4,316 per ounce by 03:40 GMT, after hitting a new low since March 24 on Friday.

The Saudi stock exchange closed 0.6 percent lower on Sunday, its first trading day of the week, as bellwether Aramco fell 0.6 percent due to global energy market volatility.