Global crude oil prices dropped from earlier highs on Monday after an intraday rally driven by missile exchanges between Iran and Israel lost momentum as traders locked in profits and reassessed supply disruption risks.
Brent crude rose sharply in early trading to around $96 per barrel following the escalation, but later fell back to $94.24 per barrel. As at the time of writing 07:47 pm (WAT), Brent was trading at $94.24 per barrel, representing a decline of about 2 per cent from the day’s peak. U.S. benchmark West Texas Intermediate (WTI) also eased to $91.15 per barrel, after touching higher levels earlier in the session.
The early spike was directly triggered by reports of Iranian missile strikes on Israel and subsequent Israeli retaliatory action, which raised immediate concerns over possible disruptions to shipping through the Strait of Hormuz. The route handles a significant share of global crude and fuel exports, and any threat to its operation typically feeds into rapid price gains.
Later in the session, prices corrected downward after statements emerged indicating that escalation had not widened beyond the initial exchange. Attention also shifted to diplomatic positioning around the Strait of Hormuz. Iran’s Ambassador to Russia, Kazem Jalali, stated that the waterway would reopen under new operational terms involving Iran and Oman, including possible transit charges for vessels using the route.
Despite the drop from intraday highs, Brent remains above pre-escalation levels, reflecting the continued pricing of geopolitical risk in the market. Trading activity showed that the earlier rally was driven by short-term positioning around conflict headlines, while the pullback was led by profit-taking once immediate supply disruption fears did not materialise further.