Brent crude climbed above $115 a barrel on Monday, extending a rally that has gathered pace since the Iran war began nearly five weeks ago, as the conflict showed fresh signs of escalation on multiple fronts.
Yemen's Houthi rebels launched strikes against Israel over the weekend, their first direct military intervention since hostilities between the US and Iran began, according to Reuters and Bloomberg. The widening of the conflict into the Red Sea corridor heightened fears over supply disruption across a region that accounts for a significant share of global crude output and transit.
US Brent prices have also been stoked by reports, cited by CNBC, that the Trump administration is considering measures to seize or control Iranian energy assets. Secretary of State Rubio separately flagged concerns that rattled markets, according to Barron's, helping push US crude back above $100 a barrel.
Iran warned Washington explicitly against any ground invasion, a statement that CNN reported added to the geopolitical risk premium baked into prices. Al Jazeera reported Brent reaching $116 a barrel as the accusation that the US was preparing an incursion circulated.
Brent is heading for a record monthly surge, according to CNBC and Reuters, surpassing previous spikes associated with the 1973 Arab oil embargo and the 1990 Gulf War in terms of the pace of monthly appreciation. Asian equities slid alongside the oil move, with the BBC noting broad pressure across regional stock markets.
Analysts cited by CNBC have warned that the next few weeks of the war will be decisive for the broader economy, with a sustained oil price above $115 threatening to reignite inflation in the US and Europe at a moment when central banks have limited room to respond. US gasoline prices have risen sharply since the conflict began, though Fox Business reported they may not yet have peaked.
