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Oil hits five-month high after US attacks key Iranian nuclear sites

 Oil prices jumped on Monday to their highest since January as the United States' weekend move to join Israel in attacking Iran's nuclear facilities stoked supply worries.

Brent crude futures were up $1.92 or 2.49% at $78.93 a barrel as of 0117 GMT. U.S. West Texas Intermediate crude advanced $1.89 or 2.56% to $75.73.

Both contracts jumped by more than 3% earlier in the session to $81.40 and $78.40, respectively, touching five-month highs before giving up some gains.

The rise in prices came after U.S. President Donald Trump said he had "obliterated" Iran's main nuclear sites in strikes over the weekend, joining an Israeli assault in an escalation of conflict in the Middle East as Tehran vowed to defend itself.

Iran is OPEC's third-largest crude producer.

Market participants expect further price gains amid mounting fears that an Iranian retaliation may include a closure of the Strait of Hormuz, through which roughly a fifth of global crude supply flows.

Iran's Press TV reported that the Iranian parliament had approved a measure to close the strait. Iran has in the past threatened to close the Strait but has never followed through on the move.

"The risks of damage to oil infrastructure ... have multiplied," said Sparta Commodities senior analyst June Goh.

Although there are alternative pipeline routes out of the region, there will still be crude volume that cannot be fully exported if the Strait of Hormuz becomes inaccessible. Shippers will increasingly stay out of the region, she added.

Goldman Sachs said in a Sunday report that Brent could briefly peak at $110 per barrel if oil flows through the critical waterway were halved for a month, and remain down by 10% for the following 11 months.

The bank still assumed no significant disruption to oil and natural gas supply, adding global incentives to try to prevent a sustained and very large disruption.

Brent has risen 13% since the conflict began on June 13, while WTI has gained around 10%.

The current geopolitical risk premium is unlikely to last without a tangible supply disruption, analysts said.

Meanwhile, the unwinding of some long positions accumulated following a recent price rally could cap an upside to oil prices, Ole Hansen, head of commodity strategy at Saxo Bank, wrote in a market commentary on Sunday.

For days, the oil market has been in a volatile state as traders watched to see whether the U.S. would join Israel in attacking Iran. Now that the question is answered, prices are likely to surge, perhaps considerably.

Futures trading for crude oil doesn’t open until 6 p.m. ET on Sunday, the same time that futures trading for the stock market begins. That will give the first indication of how dramatically investors will react to the U.S.’s escalation of the conflict.

Brent crude oil prices have been on the rise, though, since Israel first launched its attack on June 12, climbing from $70.36 per barrel to $77.27 at the end of trading on Friday. (It has spiked as high as $79.02.)

U.S. military involvement in a conflict that is taking place in the region responsible for one-third of the global oil output could dramatically raise the stakes. Some analysts warn that $100 a barrel is possible, especially if Iran responds to the attacks as it has threatened to do. Iran’s Foreign Minister Abbas Araghchi said in a post on X that Iran “reserves all options to defend its sovereignty and people” after the “outrageous” U.S. attacks.

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Helima Croft, head of global commodity strategy at the investment bank RBC Capital Markets, wrote in a note to clients before the U.S. attack that the risks to oil prices were already growing at a dramatic pace, saying “we see the risk of a serious supply outage increasing significantly in an extended war scenario.”

Others are less sure the spike will be quite so dramatic. Bachar El-Halabi, senior energy markets analyst at Argus Media, a commodities research firm, wrote, “we’re in uncharted territory” on X.

“It remains unclear whether [Ali Khamenei, Supreme Leader of Iran], having incurred major losses to the main pillars of his regime’s rule, still can strategically act,” he wrote. “Setting the region on fire doesn’t seem like a favorable or likely path for Tehran. There are precedents where Iran has absorbed strikes or responded in a limited fashion instead of risking further escalation or the regime’s survival. … The next steps—by Iran, the U.S., and the Gulf—will shape the region’s, and perhaps the world’s, future in ways we can’t yet predict.”

One of the biggest questions now is whether Iran will attempt to close the Strait of Hormuz, a narrow channel in the Persian Gulf that handles roughly 25 percent of the world’s oil shipments via sea. Lawmakers in the country on Sunday reached a unanimous consensus in favor of such a move, but that was a largely ceremonial vote. The power to make the decision rests with Iran’s Supreme National Security Council.

Should Iran block that strait, whether via ships or drone attacks, it would almost certainly result in higher oil prices and could have larger impacts on the global economy, as it would impact not only the U.S., but Europe and other major gas-consuming countries. (Greece’s shipping minister has already advised shipowners to “reassess passage” through the strait, following the U.S. attacks.)

Deutsche Bank has warned that should Iran block the Strait of Hormuz, oil prices could jump to $124 a barrel. Closing the Strait of Hormuz, it’s worth noting, would also hurt Iran’s economy as it would be unable to export its own oil.

The potential for $100 a barrel oil prices is disturbing, but it wouldn’t be the highest price on oil in recent memory. In 2008, Brent crude reached nearly $150 per barrel as oil-producing nations cut back production.

Iran and Israel traded air and missile strikes as the world braced on Monday for Tehran's response to the U.S. attack on its nuclear sites and U.S. President Donald Trump raised the idea of regime change in the Islamic Republic.

Iran vowed to defend itself on Sunday, a day after the U.S. joined Israel in the biggest Western military action against the country since its 1979 Islamic Revolution, despite calls for restraint and a return to diplomacy from around the world.

Commercial satellite imagery indicated the U.S. attack on Saturday on Iran’s subterranean Fordow nuclear plant severely damaged or destroyed the deeply buried site and the uranium-enriching centrifuges it housed, but the status of the site remained unconfirmed, experts said.

In his latest social media comments on the U.S. strikes, Trump said, "Monumental Damage was done to all Nuclear sites in Iran."

"The biggest damage took place far below ground level. Bullseye!!!" he wrote on his Truth Social platform.

Trump earlier called on Iran to forgo any retaliation and said the government "must now make peace" or "future attacks would be far greater and a lot easier."

The U.S. launched 75 precision-guided munitions including bunker-buster bombs and more than two dozen Tomahawk missiles against three Iranian nuclear sites, chairman of the Joint Chiefs of Staff, General Dan Caine, told reporters.

The U.N. nuclear watchdog, the International Atomic Energy Agency, said no increases in off-site radiation levels had been reported after the U.S. strikes. Rafael Grossi, the agency's director general, told CNN that it was not yet possible to assess the damage done underground.

A senior Iranian source told Reuters that most of the highly enriched uranium at Fordow had been moved elsewhere before the attack. Reuters could not immediately corroborate the claim.

Tehran, which denies its nuclear programme is for anything other than peaceful purposes, sent a volley of missiles at Israel in the aftermath of the U.S. attack, wounding scores of people and destroying buildings in Tel Aviv.

But it had not acted on its main threats of retaliation, to target U.S. bases or choke off oil shipments that pass through the Strait of Hormuz.

Attempting to strangle the Gulf oil supply by closing the strait could send global oil prices skyrocketing, derail the world economy, and invite conflict with the U.S. Navy's massive Fifth Fleet based in the Gulf.

Oil prices jumped on Monday to their highest since January. Brent crude futures LCOc1 rose $1.88 or 2.44% at $78.89 a barrel as of 1122 GMT. U.S. West Texas Intermediate crude CLc1 advanced $1.87 or 2.53% at $75.71.

Iran's parliament has approved a move to close the strait, which Iran shares with Oman and the United Arab Emirates. Iran's Press TV said any such move would require approval from the Supreme National Security Council, a body led by an appointee of Iran's Supreme Leader, Ayatollah Ali Khamenei.

Caine said the U.S. military had increased protection of troops in the region, including in Iraq and Syria. The U.S. State Department issued a security alert for all U.S. citizens abroad, calling on them to "exercise increased caution."

U.S. Secretary of State Marco Rubio on Sunday called on China to encourage Iran to not shut down the strait, telling Fox News' "Sunday Morning Futures with Maria Bartiromo" show it would be a "terrible mistake."

"It's economic suicide for them if they do it. And we retain options to deal with that, but other countries should be looking at that as well. It would hurt other countries' economies a lot worse than ours," he said.

The Israeli military reported a missile launch from Iran in the early hours of Monday morning, saying it was intercepted by Israeli defences.

Air raid sirens blared in Tel Aviv and other parts of central Israel. Iran has repeatedly targeted the Greater Tel Aviv - a metropolitan area of around 4 million people, the business and economic hub of Israel, where there are also critical military assets.

Iranian news agencies reported air defences were activated in central Tehran districts to counter "enemy targets", and that Israeli air strikes hit Parchin, the location of a military complex southeast of the capital.

REGIME CHANGE

In a post to the Truth Social platform on Sunday, Trump raised the idea of regime change in Iran.

"It’s not politically correct to use the term, 'Regime Change,' but if the current Iranian Regime is unable to MAKE IRAN GREAT AGAIN, why wouldn’t there be a Regime change??? MIGA!!!" he wrote.

Trump's post came after officials in his administration, including U.S. Vice President JD Vance and Defense Secretary Pete Hegseth, stressed they were not working to overthrow Iran's government.

Israeli officials, who began the hostilities with a surprise attack on Iran on June 13, have increasingly spoken of their ambition to topple the hardline Shi'ite Muslim clerical establishment.

As Tehran weighed its options, Iranian Foreign Minister Abbas Araqchi is expected to hold talks with Russian President Vladimir Putin in Moscow on Monday. The Kremlin has a strategic partnership with Iran, but also close links with Israel.

Speaking in Istanbul on Sunday, Araqchi said his country would consider all possible responses and there would be no return to diplomacy until it had retaliated.

Russia's foreign ministry condemned the U.S. attacks, which it said had undermined the Treaty on the Non-Proliferation of Nuclear Weapons, and warned of the conflict spreading in the Middle East.

The U.N. Security Council met on Sunday to discuss the U.S. strikes as Russia, Chin,a and Pakistan proposed that the 15-member body adopt a resolution calling for an immediate and unconditional ceasefire in the Middle East.

U.N. Secretary-General Antonio Guterres told the Security Council the U.S. bombings in Iran marked a perilous turn in the region and urged a return to negotiations over Iran's nuclear programme.

Commercial airlines were weighing how long to suspend Middle East flights after the U.S. struck Iran. The Middle East route has become more important for flights between Europe and Asia, but flight tracking website FlightRadar24 showed empty space on Sunday over Iran, Iraq, Syria, and Israel.

The B-2 stealth bombers that dropped massive bunker-buster bombs on Iranian nuclear facilities began returning to their U.S. base in Missouri on Sunday.

An Associated Press journalist watched on a clear but windy afternoon as seven of the B-2 Spirit bombers came in for landing at Whiteman Air Force Base. The base, about 73 miles (117 kilometers) southeast of Kansas City, is home to the 509th Bomb Wing, the only U.S. military unit that operates the B-2 Spirit bombers.

The first group of four of the stealth aircraft did a loop around the base before approaching a runway from the north, while a final group of three arrived within 10 minutes.

The day before, the B-2s had been part of a wide-ranging plan involving deception and decoys to deliver what American military leaders believe is a knockout blow to a nuclear program that Israel views as an existential threat and has been pummeling for more than a week.

According to U.S. officials, one group of the stealth aircraft headed west from the base in the U.S. heartland on Saturday, intended as a decoy to throw off the Iranians.

Another flight of seven quietly flew off eastward, ultimately engaging in the Iran mission. Aided by an armada of refueling tankers and fighter jets — some of which launched their own weapons — U.S. pilots dropped 14 30,000-pound bombs early Sunday local time on two key underground uranium enrichment plants in Iran.

American sailors bolstered the surprise mission by firing dozens of cruise missiles from a submarine toward at least one other site.

U.S. officials said Iran neither detected the inbound fusillade nor mustered a shot at the stealthy American jets.

Dubbed Operation Midnight Hammer, the mission carried out a “precision strike” that “devastated the Iranian nuclear program,” U.S. officials said, even as they acknowledged an assessment was ongoing. For its part, Iran denied that any significant damage had been done, and the Islamic Republic pledged to retaliate.

One image shows President Donald Trump staring straight ahead, stone-faced, monitoring the mission that took out three Iranian nuclear enrichment sites on Saturday.

In another image, Trump stands as his chairman of the Joint Chiefs of Staff, Dan Caine, appears to speak. And whenever Trump is pictured, he is donning a bright red hat blaring his signature campaign slogan, “Make America Great Again.”

The series of photos that the White House published on its X account Saturday gives the public a rare glimpse inside the Situation Room — again stirring the intrigue that occurs any time pictures from the highly secret complex are released.

( Recall the photo of then-president Barack Obama watching the raid that killed Osama bin Laden?)

The photos from Saturday portrayed Trump with senior members of his team, including Vice President JD Vance, Secretary of State Marco Rubio — doubling as Trump’s national security adviser — White House chief of staff Susie Wiles and Defense Secretary Pete Hegseth. They are gathered around a large wooden table in the main conference room of the Situation Room, known as the “JFK Room” — named for the president who was in office when the Situation Room was established.

Trump is always in sharp focus whenever he is pictured, even as other officials in the foreground — like Hegseth or Vance — are softly blurred.

The two officials closest to Trump when he’s seated are Vance and Rubio, perhaps underscoring the depth of their influence as Trump deliberated for days whether to strike Iran.

But the president isn’t always sitting still. At points, Trump was roaming around the room, standing behind his top aide Wiles as Caine appeared to speak. Some photos show Cabinet members sitting still, intently watching something, while others show a relative flurry of activities — the Joint Chiefs chairman pointing animatedly, Hegseth conferring with another official.

There are half-empty water bottles on the wooden conference table, along with disposable cups featuring the White House seal. Colorful highlighters. A thick binder was in front of Caine.

CIA Director John Ratcliffe had a binder and papers in front of him as well, although his documents appeared to be blurred -- certainly for security reasons.

Senior administration officials not considered principals were also there. In the back of one photo is Dan Scavino, the president’s omnipresent deputy chief of staff. In another, White House counsel David Warrington is pictured.

The Situation Room that Trump and his national security team sat in is vastly different from his previous term. The sprawling complex located on the ground floor of the West Wing underwent a $50 million renovation that was completed in 2023.

U.S. President Donald Trump on Sunday raised the question of regime change in Iran following U.S. strikes against key military sites over the weekend, as senior officials in his administration warned Tehran against retaliation.

"It’s not politically correct to use the term, 'Regime Change,” but if the current Iranian Regime is unable to MAKE IRAN GREAT AGAIN, why wouldn’t there be a Regime change??? MIGA!!!" Trump wrote on his social media platform.

Trump's post came after officials in his administration, including U.S. Vice President JD Vance and Defense Secretary Pete Hegseth, stressed they were not working to overthrow Iran's government.

"This mission was not and has not been about regime change," Hegseth told reporters at the Pentagon, calling the mission "a precision operation" targeting Iran's nuclear program.

Vance, in an interview on NBC's "Meet the Press with Kristen Welker," said, "Our view has been very clear that we don't want a regime change."

"We do not want to protract this or build this out any more than it's already been built out. We want to end their nuclear program, and then we want to talk to the Iranians about a long-term settlement here," Vance said, adding the U.S. "had no interest in boots on the ground."

"Operation Midnight Hammer" was known only to a small number of people in Washington and at the U.S. military's headquarters for Middle East operations in Tampa, Florida.

Complete with deception, seven B-2 bombers flew for 18 hours from the United States into Iran to drop 14 bunker-buster bombs, Chairman of the Joint Chiefs of Staff, General Dan Caine, told reporters.

In total, the U.S. launched 75 precision-guided munitions, including more than two dozen Tomahawk missiles, and more than 125 military aircraft in the operation against three nuclear sites, Caine said.

The operation pushes the Middle East to the brink of a major new conflagration in a region already aflame for more than 20 months with wars in Gaza and Lebanon, and a toppled dictator in Syria.

DAMAGE TO FACILITIES

With the damage visible from space after 30,000-pound U.S. bunker-buster bombs crashed into the mountain above Iran's Fordow nuclear site, experts and officials are closely watching how far the strikes might have set back Iran's nuclear ambitions.

Caine said initial battle damage assessments indicated all three sites sustained extremely severe damage and destruction, but he declined to speculate whether any Iranian nuclear capabilities might still be intact.

U.N. nuclear watchdog chief Rafael Grossi was more cautious, saying while it was clear U.S. airstrikes hit Iran's enrichment site at Fordow, it was not yet possible to assess the damage done underground.

A senior Iranian source told Reuters on Sunday that most of the highly enriched uranium at Fordow, the site producing the bulk of Iran's uranium refined to up to 60%, had been moved to an undisclosed location before the U.S. attack.

Item 1 of 2 U.S. Secretary of Defense Pete Hegseth holds a briefing at the Pentagon, after the U.S. struck Iranian nuclear facilities, during the Israel-Iran conflict, in Arlington, Virginia, U.S., June 22, 2025 in this still image taken from handout video. Reuters TV/U.S. Department of Defense/Handout via REUTERS

Vance told NBC the U.S. was not at war with Iran but rather its nuclear program, and he thought the strikes "really pushed their program back by a very long time."

Trump called the damage "monumental" in a separate social media post on Sunday, a day after saying he had "obliterated" Iran's main nuclear sites, but gave no details.

Tehran has vowed to defend itself and responded with a volley of missiles at Israel that wounded scores of people and destroyed buildings in its commercial hub, Tel Aviv.

But, perhaps to avert all-out war with the superpower, it had yet to carry out its main threats of retaliation, to target U.S. bases or choke off the quarter of the world's oil shipments that pass through its waters.

Caine said the U.S. military had increased protection of troops in the region, including in Iraq and Syria.

The United States already has a sizeable force in the Middle East, with nearly 40,000 troops in the region, including air defense systems, fighter aircraft, and warships that can detect and shoot down enemy missiles.

Reuters reported last week that the Pentagon had started to move some aircraft and ships from bases in the Middle East that may be vulnerable to any potential Iranian attack.

NOT OPEN-ENDED

With his unprecedented decision to bomb Iran’s nuclear sites, directly joining Israel’s air attack on its regional arch foe, Trump has done something he had long vowed to avoid - intervene militarily in a major foreign war.

There were sporadic anti-war demonstrations on Sunday afternoon in some U.S. cities, including New York City and Washington.

It was unclear why Trump chose to act on Saturday.

At the press conference, Hegseth said there was a moment in time when Trump "realized that it had to be a certain action taken to minimize the threat to us and our troops."

After Trump disputed her original assessment, Director of National Intelligence Tulsi Gabbard on Friday said the U.S. had intelligence that, should Iran decide to do so, it could build a nuclear weapon in weeks or months, an assessment disputed by some lawmakers and independent experts. U.S. officials say they do not believe Iran has decided to make a bomb.

U.S. Secretary of State Marco Rubio, asked on CBS' "Face the Nation with Margaret Brennan" whether the U.S. saw intelligence that Iran's Supreme Leader Ayatollah Ali Khamenei had ordered nuclear weaponization, said: "That's irrelevant."

Hegseth, who said the Pentagon notified lawmakers about the operation after U.S. aircraft were out of Iran, said the strikes against Iran were not open-ended.

Rubio also said no more strikes were planned, unless Iran responded, telling CBS: "We have other targets we can hit, but we achieved our objective. There are no planned military operations right now against Iran - unless they mess around."