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US Oil Update: Futures Rally as Gulf Conflict Escalates

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Oil prices rallied more than 5% on Monday following intense weekend military exchanges between the US and Iran, which severely dampened hopes for a ceasefire.

Front-month West Texas Intermediate crude futures climbed 5.7% to $92.37 per barrel, while Brent futures gained over 5% to $95.75/bbl.

The rapid military escalation effectively erased late-week optimism surrounding the potential maritime truce, analysts noted.

"Oil rebounded from a six-week low amid ongoing uncertainty over the prospects for a peace deal to end the war with Iran," Saxo Bank analysts said.

US Central Command confirmed it executed targeted self-defense airstrikes against Iranian radar installations, air defenses, and active drone control facilities located on Qeshm Island and the coastal city of Goruk.

Compounding the regional friction, Iran's Islamic Revolutionary Guard Corps reportedly said on Monday that its aerospace forces had launched a counterstrike against a US-linked airbase.

The strikes have cast a heavy shadow over fragile diplomatic negotiations that had briefly lowered energy prices late last week, analysts said.

ANZ analysts emphasized that deep doubts persist regarding Tehran's willingness to accept Washington's newly revised parameters, a sentiment confirmed by Iran's Foreign Ministry, which publicly verified that no understanding has yet been reached.

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