Oil up on US-Iran strikes and as Israel moves further into Lebanon

Oil prices rose in early Monday trade after the US and Iran traded strikes and Israeli forces moved deeper into Lebanon, despite a temporary truce announced with Hezbollah in April.

US crude futures (WTI) increased 2.6 percent to $89.61 a barrel as of 03:00 GMT. Brent futures gained 2.1 percent to reach $93.04 a barrel.

The US said on Sunday it conducted “self-defence strikes” on Iranian radar and drone control sites in Iran’s Goruk and Qeshm Island over the weekend in what it said was a response to “aggressive” actions from Tehran, Reuters reported.

Israel captured Beaufort Castle in southern Lebanon after Israeli prime minister Benjamin Netanyahu ordered troops to advance further into Lebanon in the battle against Hezbollah.

US secretary of state Marco Rubio proposed a new plan to allow for “gradual de-escalation” after speaking to Lebanese President Joseph Aoun and Netanyahu, Reuters reported.

Brent and WTI fell nearly 2 percent on Friday amid speculation about a possible extension of a US-Iran ceasefire.

President Donald Trump was seeking changes to a potential US-Iran peace deal, particularly related to the Strait of Hormuz and the removal of highly enriched uranium, the BBC reported.

Mohammad Bagher Ghalibaf, Iran’s chief negotiator, said on Sunday that Tehran would not agree to any deal unless Iranian rights were fully secured.

Further reading:

• US sanctions target Iran’s Hormuz transit authority
• Hormuz crisis fuels Libya oil comeback
• Oil markets bet on peace as Hormuz risks persist

Iran’s IRGC Navy claimed 28 commercial vessels passed through the Strait of Hormuz, a key oil and gas shipping lane, during the past 24 hours, according to the Tasnim News Agency on Sunday.

US forces disabled five commercial vessels and redirected 116 to fully enforce the blockade, as a ceasefire with Iran remains in effect, US Central Command said in a post on X.

Concerns are rising about mines in the strait, Reuters reported, citing IG analyst Tony Sycamore.

That could slow the process of reopening the strait and mean that relief comes more slowly for the oil market even after it is reopened, he said.

Spot gold was down nearly 1 percent at $4,519 per ounce as of 03:00 GMT, after rising to a two-week high in the previous session.

The Saudi Exchange rose 0.5 percent in the first session following the Eid holidays, while heavyweight Aramco fell 1.3 percent on Sunday.