Oil prices surged by over 3% on Monday as tensions between the United States and Iran escalated, with both nations intensifying strikes on Gulf states and critical maritime routes.Brent crude futures climbed $2.34 to $78.35 per barrel, while U.S.West Texas Intermediate (WTI) crude rose $2.21 to $73.62 a barrel.The conflict intensified after Iran expanded attacks on Qatar and the UAE, while the U.S.launched further strikes on Iranian targets.

President Donald Trump declared the Strait of Hormuz open for commercial traffic, though Iran had previously closed it following an incident involving unauthorized vessel movement.Ship tracking data showed six vessels transited the strait on Sunday, the lowest number in five weeks.

Analysts warn that the fragile ceasefire between the two nations may not hold, casting doubt on a recent interim agreement aimed at reopening the strait and ending hostilities.The International Energy Agency noted that global oil supply increased by 4.1 million barrels per day in June but remained 9.4 million bpd below pre-war levels.

Market experts suggest the price rise reflects uncertainty over the conflict’s trajectory, though some view it as a temporary escalation rather than a full collapse of diplomatic efforts.