Oil prices climb more than $4 after Israeli strikes on Iran and Lebanon

Oil prices jumped more than $4 on Monday, with investors spooked by fresh Israeli strikes ‌on Iran as well as renewed attacks on Lebanon a day earlier.

Brent crude futures rose $4.42 or 4.47% to $97.15 a barrel as of 0609 GMT, while U.S. crude futures were up $4.07 or 4.50% at $94.61 per barrel.

Israel said on Monday it hit a petrochemical plant in Iran’s southwest, along with strikes elsewhere ​on military targets. That’s despite U.S. President Donald Trump reportedly telling Israeli Prime Minister Benjamin Netanyahu to refrain from ​further attacks.

“In the current market, the physical impact of such a decision would be close to zero,” Rystad Energy’s head of geopolitical analysis, Jorge ​Leon, said in a note to clients. -Reuters

In the first hit on an energy site inside Iran since the April 8 ceasefire, Israel ⁠said it struck targets at the Mahshahr petrochemical complex. A provincial official told Iran’s semi-official Fars news agency parts of the ​plant were damaged.

Hopes are now eroding for an imminent end to the wider war and a restart to crude flows through the ​Strait of Hormuz, through which roughly a fifth of the world’s oil and liquefied natural gas used to transit.

Monday’s gains erased Friday’s losses, when prices fell on hopes of a de-escalation in the U.S.-Iran conflict. Oil prices have climbed just under 60% since the start of the war in ​late February but remain below highs marked in March when Brent reached nearly $120 per barrel.

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On Sunday, Iran fired a salvo of missiles ​at Israeli targets in retaliation for the strikes on Lebanon. Even so, U.S. President Donald Trump insisted that an agreement to end the wider ‌war ⁠remains well within reach.

Iran has made a ceasefire with Lebanon a condition for a peace deal with Washington.

Israel invaded Lebanon in March after Iran-backed Hezbollah fired rockets and drones across the border. Lebanon and Israel said on June 3 that they had agreed to a ceasefire following negotiations in Washington.

On Monday, Iran’s ambassador to Moscow was quoted as saying that the Strait of Hormuz will ​be open but under new conditions​to be set by ⁠Iran and Oman, including a transit fee.

“Of course, this strait will be open, but with new conditions to be determined by the Iranian and Omani authorities,” Ambassador Kazem Jalali told the Russian newspaper ​Izvestia in an interview published on Monday.

Tehran has been blocking most shipping through the Strait ​of Hormuz, while Washington ⁠has imposed its own blockade of Iranian ports.

Amid the resulting supply crisis, OPEC+ on Sunday agreed its fourth increase in oil output in four months. But analysts said the decision would have little impact since most OPEC+ members could not meet their output ⁠targets because ​of the Hormuz closure or, in the case of Russia, infrastructure attacks that ​have eroded its production capacity.