Oil Prices Jump 5% After Israel and Iran Break Ceasefire — Is $100 a Barrel Next?

TLDR

• Israel and Iran traded missile and drone strikes for the first time since an April ceasefire
• Brent crude jumped over 5% to near $98 a barrel on Monday
• The Strait of Hormuz remains near-closed, tightening global energy supplies
• Trump urged both sides to stop fighting but peace talks remain stalled
• OPEC+ agreed to raise output in July, but experts say the move is largely symbolic

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Israel and Iran exchanged missile and drone attacks on Monday, breaking a ceasefire that had been in place since April. The strikes sent oil prices sharply higher as fears of a wider conflict returned to global markets.

Brent crude climbed more than 5% to nearly $98 a barrel in early trading. West Texas Intermediate rose by a similar amount to around $94.59 a barrel. Both benchmarks have gained more than 60% this year.

The attacks came despite US President Donald Trump urging both Israeli Prime Minister Benjamin Netanyahu and Iranian leaders to hold back. Trump posted on Truth Social that both sides must stop immediately.

Trump: Israel and Iran must immediately stop “shooting.” pic.twitter.com/XiuzulqLYp

— Wall St Engine (@wallstengine) June 8, 2026

Israel said it struck military targets inside Iran in retaliation for earlier missile launches by Tehran. The Israeli Defense Forces said the campaign could last several days and that reserve soldiers may be mobilised.

Trump told the Financial Times he is in control of any deal. “I call the shots. I call all the shots,” he said, referring to a potential US-Iran agreement.

Hormuz Remains a Choke Point for Global Energy

The near-closure of the Strait of Hormuz has continued to disrupt oil, fuel and natural gas flows to global markets. The strait is a critical route for Persian Gulf energy exports.

US Central Command said it downed two Iranian drones threatening maritime traffic in Hormuz over the weekend. Six ballistic missiles were also fired at Bahrain and Kuwait on Friday, though all were intercepted.

Yemen’s Houthi rebels said they would impose a full ban on Israeli vessels in the Red Sea. An industry group said the impact on shipping was limited for now, as many vessels were already avoiding the area.

Europe’s natural gas prices also rose on Monday. The region is in the middle of its summer inventory-building season, and disruptions to liquefied natural gas exports are adding pressure.

At its peak, Brent crude hit around $130 a barrel during this conflict. Oil remained below $100 on Monday, but analysts warned the situation could change quickly.

Ole Hansen of Saxo Bank said a lasting peace deal looks “increasingly elusive.” He added that energy markets expect oil prices to stay elevated for some time.

OPEC+ Output Hike Seen as Symbolic

OPEC+ agreed on Sunday to raise output again in July, marking four straight months of increases. However, analysts said the move has little practical effect while Hormuz remains disrupted.

Saudi Arabia also cut the price of its flagship crude for Asian buyers by $6 a barrel. The cut came as China reduced crude imports due to slower refining activity.

Even if a peace deal is reached, oil flows would not resume instantly. Mines in Hormuz would need to be cleared, damaged infrastructure repaired, and shuttered fields could take months to restart.

Trump is working on a memorandum of understanding with Iran to reopen Hormuz. Talks remain stalled over Tehran’s nuclear programme and demands for access to frozen funds.

The Israel-Lebanon truce agreed last week also hit a snag, with Hezbollah rejecting the ceasefire terms. Fighting between Israeli and Hezbollah forces continued over the weekend.