Brent crude prices surged more than five percent Monday after Israel and Iran exchanged strikes, testing a fragile truce and threatening hopes for a deal to end the Middle East crisis.
The contract for August jumped 5.1 percent to $97.83 a barrel, while West Texas Intermediate climbed 4.8 percent to hit $94.85.
Those gains erased Friday's losses, when prices fell on hopes of a de-escalation in the US-Iran conflict, which has seen oil prices rise over 50% since March.
Israel said on Monday it hit a petrochemical plant in Iran's southwest, along with strikes elsewhere on military targets, after US President Donald Trump reportedly told Israeli Prime Minister Benjamin Netanyahu to refrain from further attacks.
Trump has leaned on Israel to stop its attacks in Lebanon to allow room for a deal to end the wider war with Iran, including rebuking Netanyahu with obscenities in a phone call last week.
However, earlier on Sunday Israel launched strikes in the Beirut area for the first time since the U.S. announced a truce plan for Lebanon last week.
Iran fired salvos of missiles at Israeli targets in retaliation, but Trump insisted that an agreement to end the wider war remained within reach.
"It’s not going to have any impact on the deal," Trump told the Financial Times. "I call the shots. I call all the shots. He (Netanyahu) doesn’t call the shots."
A few hours later, Israel's defense forces said they had struck Iranian military targets.
