Oil prices surged on Monday following Israeli Prime Minister Benjamin Netanyahu's statement that the conflict with Iran is "not over," which heightened concerns about potential escalations in the Middle East that could disrupt energy supplies. Concurrently, U.S.
President Donald Trump dismissed Iran's counteroffer to resolve the ongoing conflict, labeling it as "TOTALLY UNACCEPTABLE!" As a result, U.S. West Texas Intermediate futures for June delivery increased by 3.08% to $95.42 per barrel, while Brent crude futures for July delivery rose by 3.16% to $104.49 per barrel.
Netanyahu emphasized the ongoing issues regarding Iran's nuclear capabilities, stating that there are still enriched uranium materials and enrichment sites that need to be addressed, along with Iran's support for proxies and its ballistic missile ambitions. He suggested that the U.S. and Israel would need to take direct action to remove the nuclear material.
Analysts at Citi noted that oil prices could continue to rise if no agreement is reached between Iran and the U.S., although current high inventories and strategic petroleum reserve releases have provided some cushion to the market.
They indicated that the risks to oil prices remain skewed to the upside, particularly as Iran has significant control over the reopening of the vital Strait of Hormuz, a critical energy route. Citi anticipates a potential deal by the end of May but warns that delays or partial agreements could lead to prolonged disruptions in oil supply