Oil Prices Rise as U.S.–Iran Strikes Continue Despite Peace Talks

Key Points

1.    Oil prices increased amid renewed military tensions

o    Investors reacted to fresh exchanges of strikes between the United States and Iran despite ongoing peace negotiations.

2.    Brent crude climbed above US$94 per barrel

o    Brent crude, the global benchmark, rose more than 3% to around US$94 per barrel.

3.    U.S. crude prices also surged

o    West Texas Intermediate (WTI) crude gained nearly 4% to approximately US$91 per barrel.

4.    Military actions continue

o    The United States conducted additional "self-defense" strikes in Iran.

o    Iran's Revolutionary Guard reported retaliatory strikes on a U.S. air base following an earlier U.S. attack on a communications facility.

5.    Investors balancing conflict risks with peace prospects

o    Markets remain focused on whether ongoing negotiations can lead to a durable peace agreement and ease concerns over energy supplies.

6.    Global stock markets showed mixed performance

o    U.S. stock futures indicated a modestly positive opening.

o    Asian markets were mixed:

§  South Korea's KOSPI surged about 4%.

§  Japan's Nikkei 225 and Hong Kong's Hang Seng gained nearly 1%.

§  Chinese stocks declined.

o    European stocks opened lower, with the Stoxx 600 falling 0.3%.

7.    AI-driven optimism supported some equity markets

o    Continued investor enthusiasm surrounding artificial intelligence helped lift technology-related stocks, particularly in East Asia.

8.    Gasoline prices declined despite higher crude oil prices

o    U.S. gasoline prices fell to an average of US$4.32 per gallon.

o    However, gasoline prices remain about 45% higher than before the conflict began.

9.    Diesel prices eased slightly

o    Average diesel prices fell by three cents to US$5.45 per gallon.

o    Diesel costs are still approximately 45% above pre-war levels.

10.  Fuel prices may continue to fluctuate

o    Retail gasoline prices typically lag movements in crude oil markets by several days, meaning recent oil price increases could still affect pump prices in the near term.

Conclusion

Renewed U.S.–Iran military exchanges pushed oil prices higher, reflecting persistent concerns over energy supplies and regional stability. While ongoing peace talks have helped prevent a sharper market reaction, elevated oil prices and fuel costs continue to pose risks to inflation, transportation expenses, and global economic growth.

 

[ABS News Service/01.06.2026]

Oil prices climbed on Monday as investors weighed a renewed exchange of military strikes between the United States and Iran against indications that both sides remain engaged in negotiations aimed at securing a lasting peace agreement.

Stocks were mixed, pulled higher in East Asia by the continued surge in interest in artificial intelligence and lower in Europe.

The United States said it carried out a series of “self-defense” strikes in Iran over the weekend, the latest in a series of attacks in the past week. Iran’s Revolutionary Guard announced that it had struck a U.S. air base in retaliation for a U.S. attack on a communications facility.

Oil pushes higher.

·         The price of Brent crude, the global benchmark for oil, rose more than 3 percent to about $94 a barrel for August delivery, currently the most heavily traded contract.

·         West Texas Intermediate crude, the U.S. benchmark, jumped nearly 4 percent to about $91 a barrel for July delivery, currently its most popular contract.

Stocks are mixed.

·         Futures on the S&P 500 pointed to a modest increase when stocks resume trading in the United States on Monday.

·         Stocks in Asia, where countries import vast quantities of oil and gas, were mixed. South Korea’s benchmark KOSPI surged 4 percent higher, while Japan’s Nikkei 225 and Hong Kong’s Hang Seng index rose nearly 1 percent. Stocks in China declined.

·         In Europe, stocks opened broadly lower. The Stoxx 600, a broad-index that tracks the region’s largest companies, fell 0.3 percent in early trading.

Gasoline prices slide.

·         Gas prices fell again on Monday, dropping to a national average of $4.32 a gallon, according to the AAA motor club. Still, the overall increase in gasoline prices has raised the cost for drivers by 45 percent since the war began.

·         Gas prices don’t move in lock step with crude, usually trailing increases or drops by a few days.

·         The average price of diesel pulled back three cents to $5.45 on Sunday, up 45 percent since the start of the war.