Global oil prices climbed sharply on Monday as fears of continued supply disruptions from the Middle East outweighed cautious optimism over possible diplomatic developments between the United States and Iran.
Read More: Oil prices rise amid Middle East tensions
Brent crude rose 2.75% to $108.23 per barrel, while West Texas Intermediate (WTI) gained 2.09% to $96.37. The increase came as traders reacted to ongoing instability in the region, particularly concerns over shipping routes through the Strait of Hormuz, a key global energy chokepoint.
Market sentiment remained fragile after months of heightened tensions following earlier US-Israeli strikes on Iran, which have already disrupted regional shipping and energy flows. Analysts said uncertainty over Gulf supply security continues to dominate trading behaviour.
According to reports, investors are also monitoring diplomatic signals, including a potential review by the White House of a new Iranian proposal aimed at delaying nuclear negotiations until after regional conflicts ease. Mediators, including Pakistan, are reportedly engaged in ongoing efforts to reduce tensions between Washington and Tehran.
Despite the rise in oil prices, global equity markets showed modest gains, supported by expectations of upcoming corporate earnings and economic data releases. However, analysts warned that energy market volatility could continue to weigh on broader financial sentiment.
In the United States, major stock indices posted mixed results, with the Dow Jones slipping slightly while the S&P 500 and Nasdaq recorded small gains. Investors are also closely watching central bank meetings this week, including the US Federal Reserve, which is expected to maintain current interest rates.
Currency markets reflected cautious trading, with the US dollar index slipping slightly as geopolitical uncertainty persisted. Meanwhile, Treasury yields moved higher as investors adjusted expectations ahead of key economic data releases.
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Gold prices also declined marginally, reflecting shifting risk sentiment across global markets. Overall, energy markets remain highly sensitive to geopolitical developments, with traders focused on the Strait of Hormuz and broader Middle East stability as key drivers of near-term price direction.