Oil prices ease after Iran says military operations against Israel are over
SEATTLE (OilMonster) – Oil prices retreated from intraday highs on Monday as markets reassessed geopolitical risk after Iran signaled a halt to military operations against Israel, even as both sides warned that the broader confrontation is far from resolved.
By 1:03 p.m. ET, Brent crude futures, the international benchmark, were up 1.41% at $94.40 per barrel, while U.S. West Texas Intermediate (WTI) futures gained 0.81% to $91.27 per barrel. Both contracts had traded more than 5% higher earlier in the session before giving back part of their gains as headline risk moderated.
Iran’s Foreign Ministry told CNBC that Tehran had ceased strikes against Israel, but warned that it would resume hostilities if Jerusalem continues military operations in Lebanon. Prime Minister Benjamin Netanyahu said Israel had halted strikes for now but stressed that Israel’s confrontation with Iran and Hezbollah “is not over,” keeping a firm geopolitical risk premium in crude benchmarks.
Oil prices initially surged more than 5% after Iran launched missiles at Israel in response to its campaign in Lebanon, marking the first such attack since the April ceasefire agreement. Israel responded by striking military targets in western and central Iran, according to the Israel Defense Forces, raising fears of a broader regional conflict before prices eased back.
U.S. President Donald Trump moved quickly to try to contain the escalation, saying on social media that Iran and Israel were looking to agree to a ceasefire. He added that U.S. negotiations with Iran on a final deal were continuing, though the tone from Tehran suggested limited near‑term progress.
An Iranian official involved in talks with Washington told MS NOW that “a deal with President Trump is no longer feasible at this stage,” underlining the gap between public messaging and private diplomacy. The comments reinforce market concerns that any ceasefire could be fragile and subject to rapid reversal.
Iran’s parliamentary speaker MB Ghalibaf said the U.S. naval blockade and continued Israeli strikes in Lebanon violate the April ceasefire terms. He warned that U.S. and Israeli assets in the region are now considered “legitimate targets,” a statement likely to keep shipping and energy markets on alert for further disruption.
Against this backdrop, OPEC+ agreed to raise its production targets by 188,000 barrels per day from July, according to an OPEC statement. The move marks the fourth approved quota increase since the closure of the Strait of Hormuz and is aimed at tempering price volatility while maintaining cohesion among producers.
The planned July increase matches the June adjustment but is smaller than the 206,000 barrel per day hikes approved for May and April. The slower pace follows the exit of the United Arab Emirates from the group, which has forced OPEC+ to recalibrate internal burden‑sharing and manage output growth more cautiously.
Prices eased because Iran indicated it had paused strikes against Israel, reducing immediate escalation risk even though broader regional tensions remain elevated.
Both Brent and WTI spiked more than 5% intraday before settling near $94 and $91 per barrel respectively as traders reassessed the likelihood of sustained disruption.
The spike was triggered by Iran’s missile attack on Israel in retaliation for operations in Lebanon and Israel’s subsequent strikes on military targets inside Iran.
OPEC+ is incrementally raising its collective output target, adding 188,000 barrels per day from July as part of a series of quota hikes approved since the Hormuz closure.
The pace has slowed because the group reduced monthly hikes after the UAE’s exit, which required a recalibration of how additional barrels are shared among remaining members.
