Oil climbs on fears of prolonged Israel-Iran conflict

May 11, 2026 (MLN): Oil prices surged on Monday following remarks by Israeli Prime Minister Benjamin Netanyahu signaled that hostilities with Iran were far from finished, stoking fresh concerns over potential supply disruptions in the region.

Adding to market unease, U.S. President Donald Trump publicly dismissed a counteroffer from Iranian officials aimed at bringing the conflict to a close, calling it "totally unacceptable."

Currently, Brent crude futures are slightly higher by $4.10, or 4.05%, to $105.39 per barrel, according to data by Mettis Global.

West Texas Intermediate (WTI) crude futures are up by $4.50 or 4.72%, to $99.92 per barrel by [10:50 am] PST.

Netanyahu, speaking ahead of a Sunday night appearance on CBS's 60 Minutes, outlined a series of conditions that still needed to be addressed including the removal of enriched uranium from Iranian territory, the dismantling of enrichment facilities, the disbanding of Iranian-backed proxy groups, and a halt to ballistic missile development, as reported by CNBC.

When pressed on how such nuclear material would be extracted, he stated plainly: "You go in, and you take it out."

Analysts at Citi noted that prices could climb further should diplomacy between Washington and Tehran break down.

They pointed out that oil markets have so far been partly shielded by elevated inventories, releases from strategic petroleum reserves, softer demand across developing economies, and occasional signals of possible de-escalation.

Nevertheless, Citi cautioned that the balance of risks remains tilted to the upside, given Iran's considerable leverage over the fate of the Strait of Hormuz a critical artery for global energy flows.

The bank indicated it expects a deal to reopen the Strait by late May, but warned that delays or only a partial resolution remain the more likely outcome, prolonging uncertainty for energy markets.

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