Oil jumps $2 as investors weigh Iran war stalemate, stoking supply concerns

Oil prices surged more than $2 on Monday due to concerns over the Iran war stalemate and potential supply disruptions. Brent crude futures rose $2.35 to $90.87 a barrel, while U.S. West Texas Intermediate crude futures increased $2.10 to $84.50 a barrel. President Donald Trump demanded Iran's surrender and threatened to bomb Oman if tensions escalated.

He stated the U.S. was not seeking an extension of the memorandum of understanding with Iran and asserted Iran would not reach a deal he deemed necessary. If the U.S. fails to implement an interim peace deal swiftly, Iran threatened to escalate tensions in the Strait of Hormuz and beyond. A senior Iranian official warned of further attacks if the U.S. did not fully implement the peace deal.

Despite these tensions, oil prices are not expected to rise dramatically unless there is a halt in crude exports from the Strait of Hormuz or a closure of the Bab el-Mandeb Strait. U.S. Energy Secretary Chris Wright stated that President Trump has the latitude to wait out Iran using economic sanctions and oil embargo.