- Israeli strikes reportedly hit a Tehran refinery, damaging four oil storage sites and oil production transfer centres.
- Iran’s IRGC reportedly responded by targeting a commercial tanker in the Gulf and a fuel depot in Kuwait.
- France is set to deploy about a dozen naval vessels to the Mediterranean, Red Sea, and potentially the Strait of Hormuz, President Macron said.
Iran warned that oil prices could rise to $200 per barrel if the U.S. and Israel keep targeting the country’s oil facilities, according to a report by The Wall Street Journal on Monday.
Oil prices surged above $100 a barrel for the first time since June 2022, following an escalation in the Middle East conflict, in which both sides targeted critical energy infrastructure.
“If you can tolerate oil prices above $200 per barrel, continue this game,” said a spokesperson of the Khatam al-Anbiya Central Headquarters, Iran’s military joint command, as per the report, which cited state broadcaster IRIB.
The warning came after Israeli strikes reportedly hit a Tehran refinery, damaging four oil storage sites and oil production transfer centres. Meanwhile, Iran’s Islamic Revolutionary Guard Corps (IRGC) was reported to have targeted a commercial tanker in the Gulf with a drone attack as well as a fuel depot in Kuwait.
Analysts have warned that the crisis will push prices even higher, with JPMorgan and Goldman Sachs flagging significant upside risks due to supply disruptions. Qatar’s energy minister said oil prices could reach $150 per barrel if Gulf exporters are forced to halt production.
Saudi Arabia Cuts Oil Production
Saudi Arabia has started cutting oil production, according to a Bloomberg report on Monday. The Gulf nation is the world’s largest oil exporter, producing about 10 million barrels of crude per day and exporting roughly seven million barrels.
Saudi state oil giant Aramco has diverted some shipments to Yanbu on the Red Sea through an alternative pipeline, but the route cannot fully replace exports normally sent through the Strait of Hormuz, a crucial shipping lane that transports 20% of the global oil supply.
Hormuz has been effectively closed after Iran threatened vessels passing through the narrow waterway. The disruption has also forced other Gulf producers, including the United Arab Emirates, Kuwait, and Iraq, to cut output.
France To Explore Joint Mission To Escort Ships Through Hormuz
Meanwhile, France is set to deploy about a dozen naval vessels, including an aircraft carrier strike group, to the Mediterranean and Red Sea, and potentially the Strait of Hormuz, to support allies amid the Middle East conflict. President Emmanuel Macron said the deployment will include eight warships, an aircraft carrier group, and two helicopter carriers.
Macron also proposed a joint international maritime mission to escort commercial ships and tankers, stating that the goal is to gradually reopen the Strait of Hormuz once the most intense phase of the conflict subsides.
However, Ali Larijani, Iran’s secretary of the Supreme National Security Council, said it is unlikely that any security will be achieved in the Strait of Hormuz.
At the time of writing, Brent crude futures for May 2026 deliveries were up nearly 7% to $99 per barrel, while West Texas Intermediate (WTI) contracts expiring in May 2026 traded higher by around 7% at $92.7 per barrel.
ETFs tracking oil prices gained sharply on Monday. The United States Oil Fund (USO) gained 6% to its highest levels since October 2018. Meanwhile, ProShares UltraShort Bloomberg Crude Oil (SCO), an inverse leveraged ETF trending on Stocktwits, was down 5%.
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