Global oil prices erase most gains after topping $98 a barrel as Iran announces end of current attacks after exchanging fire with Israel

By Isabel Wang and Mike Murphy

Iran signaled that it had concluded the latest military operation against Israel

Israel and Iran traded fire overnight, testing a fragile truce and threatening hopes for a deal to end the Middle East war.

Oil prices were erasing most of their earlier gains on Monday morning after Iran signaled that it had concluded the latest military operation against Israel after the two countries traded attacks overnight - an act that tested a fragile two-month cease-fire and seemed to dash hopes for a quick end to the Middle East conflict.

West Texas Intermediate crude prices (CL.1) (CLN26) were up 1.4%, to $91.76 a barrel, after rising to a session high of $95.48 in early morning trading. Brent crude (BRN00) (BRNQ26) was rising 1.6%, to $94.55 a barrel. The global benchmark popped as much as over 5% at one point, topping $98 a barrel and on pace for its biggest one-day advance since May 4, according to Dow Jones Market Data.

Israel retaliated against Iran for firing a barrage of missiles at it on Sunday, following Israeli airstrikes on Beirut targeting Iranian-backed Hezbollah. It was the first Iranian attack against Israel since the cease-fire agreement took effect exactly two months ago.

But Iran's Revolutionary Guards Corps on Monday morning signaled that Iranian forces had concluded the latest military operation against Israel, according to a statement issued by its top military command at Khatam al-Anbiya central headquarters, though it threatened to resume attacks "if aggression and hostile acts continue."

The escalation between Iran and Israel threatens to restart conflicts across the region, and could endanger ongoing negotiations to end the war and reopen the strategic Strait of Hormuz, said David Morrison, senior market analyst at Trade Nation.

Read: America's crude inventories are getting perilously low. But that's not the full story.

Also on Sunday, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, approved an increase in July crude output. The seven nations, led by Saudi Arabia, agreed to raise production targets by 188,000 barrels a day, further unwinding output cuts that began in 2023 - although the move is largely symbolic with the Strait of Hormuz remaining effectively shut by the Iran war.

The announcement also doesn't account for production by the United Arab Emirates, which pulled out of OPEC+ last month.

The OPEC+'s decision to raise its output target is "unlikely to have any effect on oil prices" as the Strait of Hormuz remains closed and controlled by Iran, Morrison told MarketWatch in emailed commentary on Monday.

"But it is worth noting that this is the fourth successive increase by OPEC+ of its oil output targets. If OPEC+ continues at this current rate, it will have made back all the 1.65-million-barrel production cut from 2023 by September this year," he said.

-Isabel Wang -Mike Murphy

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06-08-26 0839ET