Oil prices climbed Monday morning after a surge of direct military action between Israel and Iran over the weekend marked the most serious ceasefire violation since the truce took effect in early April, raising fresh fears about the durability of peace negotiations and the global energy supply situation.

Brent crude futures rose roughly 1.8% to trade above $94.50 per barrel, while U.S. West Texas Intermediate steadied at a gain of 1.5% near $92 per barrel. At the peak of the weekend’s escalation, both benchmarks surged more than 4%, with Brent topping $97 and WTI crossing $95.

What Happened Over the Weekend

The sequence of events began Sunday when Israel launched strikes against Hezbollah targets in the Lebanese capital of Beirut. Iran responded within hours by firing missiles directly at Israel, marking the first direct exchange of air fire between the two nations since the April 8 ceasefire was signed.

Israel then launched a barrage of retaliatory strikes inside Iran, hitting a petrochemical plant in southwestern Iran that Israeli officials said is used in the production of ballistic missiles.

Iranian Revolutionary Guard Corps leaders said Monday that Iran’s wave of attacks had concluded but warned that if aggression continues, including in southern Lebanon, “far more severe and forceful measures than before will follow.”

Iran’s top negotiator, Mohammad-Bagher Ghalibaf, said the U.S. naval blockade of the Strait of Hormuz and what he described as American permission for Israel’s Lebanon strikes could make American and Israeli bases and assets across the region legitimate military targets.

Trump Calls for an Immediate Ceasefire

President Donald Trump responded to the overnight exchanges on social media early Sunday morning, calling on both Israel and Iran to immediately stop shooting. Shortly after, he said both parties were looking to pursue an immediate ceasefire and that final peace negotiations were proceeding.

Trump told NBC’s Meet the Press in an interview aired Sunday that the United States was “very close” to a deal with Iran and claimed Iranian leaders had conceded that they would not develop nuclear weapons, a significant and disputed assertion given Iran’s longstanding public position on its nuclear program.

Trump also said any deal would include the removal of enriched nuclear material from Iran, but would not involve lifting economic sanctions or unfreezing Iranian assets, two conditions Iran has consistently described as non-negotiable requirements for any agreement.

The Lebanon Fracture Is Undermining US Negotiations

The weekend’s escalation exposed a fundamental tension that has plagued U.S. diplomacy throughout the conflict.

While the White House has continued pursuing negotiations with Tehran, Israel has maintained a major ground offensive in Lebanon aimed at eliminating Hezbollah. 

Iran has repeatedly insisted that any ceasefire agreement with the United States must include a halt to Israeli operations in Lebanon, a condition Israel has refused to accept.

Trump acknowledged the tension in a phone call reported by the Financial Times over the weekend, saying “I call all the shots, he doesn’t call the shots” in reference to Israeli Prime Minister Benjamin Netanyahu. 

However, Israel’s continued Lebanon operations suggest that gap in command authority has not been resolved on the ground.

Houthis Threaten Red Sea Shipping

The weekend’s developments were compounded by a new threat to oil routes that had been serving as an alternative to the blocked Strait of Hormuz.

The Houthi militia, the Iran-backed armed group controlling much of Yemen, announced Monday a complete ban on Israeli vessels transiting the Red Sea, describing all such movements as legitimate military targets.

The Houthis had previously disrupted Red Sea shipping through the Bab-el-Mandeb strait in 2023 following the start of the Israeli military campaign in Gaza. Commercial activity through that waterway had only recently begun to recover.

That recovery matters significantly for global energy markets because Saudi Arabia’s East-West pipeline has been routing between 5 million and 7 million barrels per day of crude to the Port of Yanbu for shipment northward through the Suez Canal and southward through the Bab-el-Mandeb. 

Any renewed disruption to that route would remove one of the few meaningful alternatives to the strait that has kept at least some Gulf oil reaching global markets.

The Bigger Picture

The weekend’s military exchanges illustrate how many distinct flashpoints the peace effort must simultaneously manage.

More than 14 million barrels per day of oil that would normally flow through the Strait of Hormuz remain effectively blocked. The Iran-U.S. ceasefire framework is under renewed strain. The Lebanon front continues to complicate any comprehensive agreement. 

And now the Red Sea route faces fresh threats from Houthi action that could close the last significant valve through which Gulf oil is reaching global markets.