By Goran_tek-en, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=115671987
TORONTO — Oil prices climbed Monday after Iran and Israel exchanged fresh missile strikes, raising concerns a fragile ceasefire may be giving way to a prolonged stalemate with significant implications for global energy markets.
Benchmark crude prices initially surged more than five per cent in Asian trading before retreating. By Monday afternoon, Brent crude was trading near US$95 per barrel while West Texas Intermediate hovered around US$92.
The renewed fighting comes after weeks of conflict and follows what had been viewed as a tentative ceasefire agreement. While both sides have signalled interest in negotiations, the latest exchange of attacks has cast doubt on the prospect of a near-term diplomatic breakthrough.
U.S. President Donald Trump publicly called on both countries to halt military operations, while Iranian officials indicated discussions remain ongoing. However, neither side appears close to a comprehensive settlement.
For oil markets, the return of hostilities has restored much of the geopolitical risk premium that had begun to fade as hopes for diplomacy grew.
At the centre of market concerns remains the Strait of Hormuz, one of the world’s most important energy shipping corridors. Any prolonged disruption to traffic through the waterway could affect global oil supplies and keep prices elevated.
Analysts note crude prices remain significantly above levels seen before the conflict escalated earlier this year, despite recent fluctuations tied to diplomatic developments.
Supply fundamentals have also contributed to market strength.
Recent U.S. Energy Information Administration data showed commercial crude inventories fell by eight million barrels, leaving stockpiles below seasonal norms. While gasoline and distillate inventories increased modestly, both remain below five-year averages.
The combination of lower inventories, restricted Middle East energy flows and ongoing geopolitical uncertainty has left traders closely monitoring developments.
Some market observers believe the conflict could settle into a prolonged standoff rather than move quickly toward either a lasting peace agreement or a broader regional war. Such a scenario could keep oil prices elevated for months as buyers factor continued supply risks into the market.
Others caution economic concerns, including inflation and the possibility of higher interest rates, could limit how far prices rise by reducing fuel demand and slowing global growth.
For now, markets appear caught between two competing forces: hopes diplomacy will eventually ease supply concerns and fears a prolonged stalemate could further tighten global oil markets.
With Brent crude holding near US$95 per barrel and West Texas Intermediate remaining above US$90, energy markets continue to signal uncertainty over both the conflict’s outcome and its long-term impact on global supplies.









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