Oil prices continued to rise on Monday, with Brent crude approaching a record monthly increase after Yemen's Houthis expanded the war by launching their first attacks on Israel, UNN reports, citing Reuters.
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Brent crude futures jumped $2.26, or 2%, to $114.83 a barrel at 13:20 GMT (15:20 Kyiv time) after rising 4.2% on Friday. U.S. West Texas Intermediate crude rose $1.49, or 1.5%, to $101.13 after a 5.5% gain in the previous session.
Brent crude has soared about 58% this month, its sharpest monthly jump on record since LSEG began tracking in 1988, surpassing the gains seen during the 1990 Gulf War. Meanwhile, U.S. crude prices have risen 51%, marking their largest monthly gain since May 2020.
The surge was driven by Iran's de facto closure of the Strait of Hormuz, through which a fifth of the world's oil and gas supplies pass.
The conflict, which began on February 28 with U.S. and Israeli strikes on Iran, has since spread across the Middle East, raising fears about shipping lanes around the Arabian Peninsula and the Red Sea.
Fueling prices, U.S. President Donald Trump on Monday issued another warning to Iran: either open the Strait of Hormuz or face the risk of U.S. attacks on its oil wells and power plants.
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"Significant progress has been made, but if for some reason a deal is not reached soon, which is likely to happen, and if the Strait of Hormuz is not immediately 'open for business,' we will end our beautiful 'stay' in Iran by blowing up and completely destroying all their power plants, oil wells, and Kharg Island," Trump wrote in a social media post.
As more U.S. troops arrived in the Middle East, Trump had previously stated that the U.S. and Iran were holding meetings "directly and indirectly," and that Tehran's new leaders were "behaving very smartly."
However, on Monday, the Israeli military said it was attacking Iranian government infrastructure across Tehran.
Earlier, Trump had stated that he would suspend attacks on Iran's energy grid until April 6.
Trump suspends strikes on Iranian energy facilities until April 626.03.26, 22:32
"Trump's extended deadline of April 6, when the U.S. could potentially resume attacks on Iran's energy infrastructure, had no calming effect. The market is now looking for concrete signs of de-escalation, not just rhetoric," SEB Research said in a note.
On Monday, the Israeli military said Iran had fired several waves of missiles at Israel, and that the attack was launched from Yemen – only the second such instance since the war began.
"The conflict is no longer concentrated in the Persian Gulf and around the Strait of Hormuz, but is now spreading to the Red Sea and the Bab el-Mandeb Strait – one of the world's most important chokepoints for oil and petroleum product supplies," JP Morgan analysts said in an analytical note.
According to analytics firm Kpler, Saudi oil exports rerouted from the Strait of Hormuz to the port of Yanbu in the Red Sea reached 4.658 million barrels per day last week.
If exports from Yanbu are disrupted, Saudi oil would have to be rerouted to Egypt's Suez-Mediterranean (SUMED) pipeline to the Mediterranean Sea, JP Morgan analysts said.
Attacks in the region intensified over the weekend, damaging a terminal in Salalah, Oman, despite attempts to initiate ceasefire talks.
Iran stated its readiness to respond to a U.S. ground attack, accusing Washington on Sunday of preparing a ground attack despite seeking negotiations.
Pakistani Foreign Minister Ishaq Dar said they discussed possible ways to achieve a swift and lasting end to the war in the region, as well as potential U.S.-Iranian talks in Islamabad.
Separately on Monday, Vietnamese company Binh Son Refining and Petrochemical said it was in talks with Russian partners to purchase oil. The company also said it would buy more oil from Africa, the U.S., and Southeast Asia.
The European Union does not face an immediate supply shortage, but there is an exacerbation of the situation in the diesel and jet fuel markets, and EU energy ministers will hold talks on Tuesday on how to coordinate their actions in response to disruptions, according to an EU information document.
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