Oil Prices Pull Back as Reports Suggest Iran Has Halted Military Operations Against Israel

Oil prices gave back part of their earlier gains on Monday after reports emerged that Iran had suspended military operations against Israel, easing some concerns over a wider regional conflict and potential disruptions to global energy supplies.

Despite the pullback, crude oil prices remained elevated as investors continued to monitor developments in the Middle East and assess the potential impact on global supply chains.

Oil Prices Remain Higher Despite Retreat

Brent crude futures for August delivery rose 1.7% to $94.62 per barrel, while U.S. West Texas Intermediate (WTI) crude futures for July delivery gained 1.3% to $91.71 per barrel.

The rebound followed a sharp surge earlier in the session after renewed military exchanges between Israel and Iran raised concerns about the stability of the region and the security of critical energy infrastructure.

Both oil benchmarks had ended a two-week winning streak on Friday before geopolitical tensions once again pushed prices higher.

Iran Reportedly Suspends Military Operations

According to Iran’s semi-official Fars News Agency, the country’s armed forces announced a halt to military operations against Israel.

The report helped calm market fears after a weekend marked by escalating military activity between the two nations.

Investors interpreted the development as a potential sign that both sides may be seeking to avoid a broader conflict, reducing immediate concerns about further disruptions to oil production and transportation routes.

Israel-Iran Conflict Raises Supply Concerns

Earlier in the day, Israel announced strikes targeting military facilities in western and central Iran, as well as a petrochemical complex near Mahshahr.

The attack represented one of the most significant strikes against Iranian energy-related infrastructure since a ceasefire agreement was reached in April.

The latest military action came after Iran launched multiple missile attacks against Israeli targets in response to Israeli operations near Beirut, Lebanon.

The renewed hostilities have increased uncertainty surrounding regional stability and raised questions about the durability of existing ceasefire arrangements.

Trump Calls for Restraint

Reports indicated that U.S. President Donald Trump urged Israeli Prime Minister Benjamin Netanyahu not to retaliate further against Iran following recent missile attacks.

The diplomatic effort comes as Washington attempts to preserve a fragile ceasefire extension between Israel and Lebanon that was implemented last week.

However, the latest military exchanges have cast doubt on the effectiveness of those efforts and increased concerns that the conflict could escalate further.

Strait of Hormuz Remains in Focus

One of the biggest concerns for energy markets remains the Strait of Hormuz, a strategically important shipping route through which approximately 20% of global oil consumption passes.

Any disruption to traffic through the waterway could significantly impact global energy supplies and drive oil prices sharply higher.

The latest tensions have renewed investor focus on the region’s critical role in global energy markets and the potential consequences of a prolonged conflict.

OPEC+ Continues Increasing Production

On the supply side, OPEC+ recently agreed to increase oil production quotas by 188,000 barrels per day for July, continuing its gradual strategy of reversing previous voluntary production cuts.

However, ongoing logistical challenges and export disruptions in the Persian Gulf region have limited the ability of several producers to fully implement the additional output.

As a result, increased production targets may provide only limited relief to markets if geopolitical tensions continue to threaten supply flows.

Outlook

Oil prices remain highly sensitive to developments in the Middle East. While reports of Iran halting military operations have eased immediate fears, investors continue to monitor the situation closely for signs of further escalation.

With concerns surrounding the Strait of Hormuz, ongoing geopolitical uncertainty, and constrained supply conditions, volatility in crude oil markets is likely to remain elevated in the near term.