Global oil markets experienced heightened volatility on Monday as military strikes between Israel and Iran escalated over the past four days.
Brent crude oil, against which Nigerian oil is priced, climbed as much as 5.5% in early Asia trading session before settling near $84 per barrel. West Texas Intermediate (WTI) traded around $74 amid uncertainty over the extent of infrastructure damage and possible escalation in the Persian Gulf.
Traders reacted to concerns that further hostilities could impact oil transit routes and production facilities across the Middle East.
The conflict escalated sharply after Israel launched a series of airstrikes on Iranian military and nuclear facilities, resulting in the deaths of several top commanders and atomic scientists.
In retaliation, Iran fired waves of drones and ballistic missiles into Israeli territory, including Tel Aviv, where one missile struck near the US consulate, causing structural damage and civilian injuries.
As of Monday morning, Iranian authorities reported 224 deaths, predominantly civilians, while Israeli officials confirmed 23 fatalities and more than 400 injuries.
Israeli airstrikes reportedly achieved air superiority over Tehran and key Iranian regions, severely weakening Iran’s air defense systems and triggering a new phase in the long-standing conflict.
Although Israel has avoided direct attacks on Iran’s oil fields or crude transport terminals, Iranian state media reported an explosion at a gas plant linked to the South Pars field over the weekend.
The plant is not a major export hub, but any further disruptions in the energy-rich region could fuel price volatility and tighten global supply conditions.
Analysts warn that a prolonged conflict may heighten the risk of Iran targeting vessels in the Strait of Hormuz, a strategic chokepoint through which roughly 20% of the world’s oil passes. Such a move could significantly disrupt global oil flows and force military intervention by international powers, including the United States.
The International Atomic Energy Agency (IAEA) confirmed that Israeli strikes damaged Iran’s uranium-conversion facility in Isfahan.
Following the attack, Iran’s Deputy Foreign Minister Kazem Gharibabadi announced a suspension of cooperation with the agency and suggested Iran could exit the Nuclear Non-Proliferation Treaty, increasing geopolitical risk premiums in energy markets.
Equities across the Gulf Cooperation Council (GCC) were impacted by the geopolitical tension. The Saudi Stock Exchange declined over 2% during early trading hours, while Egypt’s EGX30 fell sharply as the Egyptian pound weakened beyond 50 per dollar in local trades. Qatar’s main index also recorded losses, reflecting regional investor concern over potential conflict spillovers.
In contrast, Israeli defense stocks rose significantly. Elbit Systems Ltd. led gains on the Tel Aviv Stock Exchange, as investors anticipated increased government spending on defense and missile systems.
Despite diplomatic efforts, there was no indication of de-escalation as of Monday. Israeli Prime Minister Benjamin Netanyahu stated that Iran would “pay a very heavy price” for its attacks on civilians. Defense Minister Yoav Gallant confirmed continued military operations aimed at neutralizing Iran’s nuclear program and command structure.
US President Donald Trump, speaking on Truth Social, suggested peace between Israel and Iran “will happen soon,” but also noted that “sometimes they have to fight it out.” His administration has so far refrained from direct military involvement but continues to support Israel’s defense through missile interception systems.
The conflict is expected to dominate discussions at the upcoming G7 summit in Canada, with global leaders under pressure to mitigate risks to global oil security and prevent a broader regional war.
With no resolution in sight, market participants are bracing for continued volatility in energy and financial markets. Further attacks on strategic infrastructure or oil transit routes could result in sharp price increases and renewed supply chain disruptions across global economies.
