New Delhi: World crude oil prices increased more than 4 percent after Israel and Iran traded strikes, raising concerns over a shaky truce even as Trump indicated a peace agreement may be near.
The fresh fighting heightened worries about a possible extended shutdown of the vital Strait of Hormuz.
Brent crude futures gained $4.42 or 4.47 percent to reach $97.15 a barrel, while U.S. crude futures rose $4.07 or 4.50 percent to $94.61 per barrel, Reuters reported.
The exchanges between Iran and Israel added further uncertainty to the tense region. Oil prices had declined on Friday amid hopes that the US and Iran were nearing a peace accord.
Crude oil prices have increased since the conflict began in late February, peaking at $120 per barrel in March.
Iran launched missiles at Israeli sites on Sunday following Israeli air strikes on Lebanon. Israel responded with attacks on Iran, including a petrochemical facility, despite Trump calling for caution and stating a deal is close.
A lasting ceasefire between Israel and Lebanon plus an immediate halt to fighting remain key Iranian conditions for any US peace agreement.
Meanwhile, OPEC+ approved a production rise of 188,000 barrels per day for July, marking the fourth increase in successive months. The move occurred even as members faced output shortfalls due to the Hormuz blockade.
Elevated crude prices have sparked inflation concerns across the US and other economies. Higher energy costs have strained US household finances, pushing consumer sentiment to a record low in May.
Stronger US employment figures released on Friday reduced expectations for a Federal Reserve rate cut this year. New Fed chair Kevin Warsh will lead his first FOMC meeting on June 16-17.
