Brent crude and U.S. futures advanced Monday amid escalating Middle East tensions and record-low global inventories.
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Oil prices rose Monday as U.S. President Donald Trump issued a fresh warning to Iran over the weekend, signaling that deadlocked peace negotiations could deteriorate further.
International benchmark Brent crude futures for July climbed 0.64% to $109.96 a barrel. U.S. West Texas Intermediate futures for June advanced 0.55% to $106 per barrel.
Trump wrote on social media Sunday that "For Iran, the Clock is Ticking, and they better get moving, FAST," adding that "there won't be anything left of them" if Iranian leaders do not accept a peace agreement. The warning came as peace talks between Washington and Tehran entered their sixth week of ceasefire, with negotiations at an impasse.
Iran conveyed an amended set of terms for a potential peace deal to the Trump administration via Pakistani mediators, according to officials. Tehran said it is focused entirely on reaching an agreement to end the war and has not yet discussed any details regarding nuclear matters.
The International Energy Agency has warned that oil inventories globally were depleting at a record pace, adding to upward pressure on crude prices. Market analysts said re-escalation risks are increasing in the 80-day conflict in the Middle East.
Oil prices took another upturn following an attack on a nuclear power plant in the United Arab Emirates, which occurred earlier in the week.
The Israel Defense Forces issued an evacuation warning to people in southern Lebanon on Monday, accusing the Iranian-backed group Hezbollah of violating a U.S.-brokered ceasefire between Israel and Lebanon. The IDF warned of imminent strikes in response to alleged violations.
Global financial markets reflected broader uncertainty. Bond markets wobbled Monday as fresh tensions in the Middle East fed inflation fears and bets that central banks will have to increase interest rates. Treasury yields surged to the highest levels in over a year for the 10-year and 30-year interest rates on Friday, with traders positioning heavily for lower bond prices and higher yields through put contract purchases.
President Trump acknowledged higher fuel costs will persist for a period but said the conflict has had less economic impact than anticipated.
Brent crude fell below $90 a barrel after Iran declared the strategic waterway completely open for commercial traffic during the Israel-Lebanon ceasefire.
Satellite images reveal an oil spill near Iran's key energy hub, spreading across 20 square miles between May 6 and 8.
President Trump extended a temporary truce with Iran pending submission of a unified proposal, while keeping U.S. military blockade in place.
The United Arab Emirates carried out retaliatory military strikes against Iran, including an attack on Lavan Island refinery that caused a large fire, just as a cease-fire was being solidified.
President Trump threatened severe consequences if Iran fails to reach a peace deal, as Tehran plans Strait of Hormuz tolls and Hezbollah strikes Israeli targets.
