Oil Prices Soar as Middle East Tensions Escalate

Oil prices have surged more than 4% as tensions rise in the Middle East following renewed conflict between Israel and Iran. The clashes have raised concerns about a prolonged closure of the Strait of Hormuz, a critical waterway that connects major oil-producing countries to global markets.

The Brent crude futures price rose $4.42 or 4.47% to $97.15 per barrel, while US crude futures increased by $4.07 or 4.50% to $94.61 per barrel, according to Reuters. The recent surge in oil prices comes despite hopes of a peace deal between the US and Iran.

Iran fired missiles at Israeli targets on Sunday after striking Lebanon with air strikes, prompting Israel to retaliate with strikes on Iranian territory, including a petrochemical plant. US President Trump urged restraint, saying that a deal is 'very close', but it remains unclear whether a durable ceasefire will be achieved between Israel and Lebanon.

Meanwhile, OPEC+ has decided to increase oil production by 188,000 barrels per day in July, with this being the fourth hike in as many months. The decision comes despite member countries struggling to meet production targets due to the ongoing blockade of the Strait of Hormuz.