Oil Prices Soar as Iran Missile Attack on Israel Tests Ceasefire and Risks Hormuz
Oil prices rose sharply on Monday after Iran launched several waves of missiles toward Israel, raising concerns that the fragile ceasefire in the Middle East is again under threat. Brent briefly surged as much as 3.6% to US$96.47/barrel, while WTI rose to near US$94 before paring some of its gains.
Iran called the attack a warning to Israel to halt its military action in Lebanon. The Israeli military said all missiles were intercepted and there were no casualties. While the immediate impact was limited, energy markets reacted quickly because any escalation increases the risk of supply disruptions, especially as US-Iran diplomacy remains ineffective.
US President Donald Trump has pushed Iran back to the negotiating table and reportedly criticized Israel's attack on Beirut. He also said he would pressure Israeli Prime Minister Benjamin Netanyahu not to retaliate. However, the escalating exchange of fire over the past week suggests the situation remains volatile, and markets view the chances of a de-escalation as fragile.
The market's primary focus remains on the Strait of Hormuz, which is nearly closed, hindering the flow of oil, petroleum products, and gas to global markets. The day before, CENTCOM announced it had shot down two Iranian attack drones threatening maritime traffic in Hormuz, following missile launches toward Bahrain and Kuwait. This series of incidents has strengthened the risk premium as the market anticipates the possibility of longer shipping restrictions and potential disruptions extending to alternative routes such as the Red Sea.
On the negotiating side, significant deadlocks remain—particularly Iran's demand for a parallel ceasefire between Israel and Lebanon. Although Israel and Lebanon agreed to a conditional ceasefire, Hezbollah rejected it, and fighting continues. Therefore, market participants see oil prices continuing to move in a "headline-driven" manner: when optimism about a deal gets ahead of the facts on the ground, prices tend to quickly "snap back."
Even if a US-Iran deal is reached, supply recovery will not be immediate. Clearing mines in Hormuz, restarting shut-in fields, and repairing infrastructure affected by drone/missile attacks could take months. Meanwhile, OPEC+ has agreed to an additional July production quota of 188,000 bpd, but export constraints from the Persian Gulf are limiting the realization of this increase in the near term.
Latest prices (Asia morning): Brent for August rose around 2.6% to US$95.48/barrel, while WTI for July rose 2.3% to US$92.65/barrel. (asd)*
Source: Newsmaker.id
