Oil prices extended gains on Monday as the U.S.-Israel campaign against Iran entered its third week, threatening critical energy infrastructure. Brent crude futures rose $2.01 to $105.15 a barrel, while U.S. West Texas Intermediate climbed $1.61 to $100.32.
The Strait of Hormuz-handling a fifth of global oil supply-remains closed after Iran halted shipments in response to strikes. The U.S. has threatened further attacks on Kharg Island, which handles 90% of Iran’s exports.
Iranian drones targeted a key UAE terminal in Fujairah, though loading operations have resumed. Fujairah processes about 1 million barrels per day of Murban crude, equivalent to 1% of global demand.
SEB analyst Erik Meyersson warned of high-risk military options, including raids on nuclear sites or occupying southern Iran to secure the strait. President Trump plans to announce a coalition of warships to escort vessels through the strait this week.
The International Energy Agency announced a record draw of over 400 million barrels from reserves, with Asian and Oceania stocks released immediately and European and American supplies by late March.
Despite these measures, diplomatic efforts stall. Iran refuses ceasefire until U.S. and Israeli strikes stop. U.S. Energy Secretary Chris Wright said the conflict should end within weeks, followed by a rebound in supplies and lower energy costs.