• Oil prices climbed sharply on Monday, with Brent rising 2.8% to $93.63 and WTI gaining 3.4% to $90.29, as weekend military exchanges between the U.S. and Iran stoked geopolitical risk.
  • Reports emerged of U.S. strikes on Iranian radar and drone command sites after Iran downed a U.S. drone, while Kuwait reported missile and drone attacks, heightening concerns over supply disruptions.
  • President Trump said Iran “really wants a deal” and that negotiations could prevent it from obtaining a nuclear weapon, but markets remain focused on near-term escalation risks.

Oil prices rebounded on Monday as fresh military confrontations between the United States and Iran reignited fears of supply disruptions in the Middle East. Brent crude settled up 2.8% at $93.63 a barrel, while West Texas Intermediate rose 3.4% to $90.29, reversing some of May’s steep 19% decline in Brent.

The move followed weekend reports that the U.S. carried out strikes on Iranian radar and drone command sites, retaliating after Iran shot down a U.S. drone. Kuwait also reported missile and drone attacks, though no group claimed responsibility. The incidents mark a significant escalation after weeks of relative calm, with traders now pricing in a higher risk premium tied to potential disruptions through the Strait of Hormuz.

“The market is reacting to the immediate threat to supply routes,” said one analyst. “Any disruption at Hormuz could send prices significantly higher, even if temporary.”

President Trump, in remarks over the weekend, struck a conciliatory note, stating that Iran “really wants a deal” and that negotiations would prevent it from obtaining a nuclear weapon. However, his administration’s actions on the ground tell a different story, leaving investors confused about the direction of policy. “The mixed signals from Washington are adding to the volatility,” noted a trader.

Efforts to reach Iranian officials for comment were unsuccessful. The White House declined to comment on the reported strikes.

The risk of a sustained conflict remains low, analysts say, but the uncertainty is unlikely to dissipate quickly. Without a de-escalation, prices could remain elevated, with Brent potentially testing $100 a barrel. Conversely, a diplomatic breakthrough could see the risk premium evaporate as quickly as it appeared.