Oil jumps back to $115 a barrel as the Iran war widens again

Oil prices spiked anew on Monday, with Brent crude trading at almost $116 a barrel, while West Texas Intermediate reached about $102. The price surge followed a weekend of escalation in the U.S.-Israeli war against Iran as the conflict entered its second month: Iran-aligned Houthi forces in Yemen launched ballistic missiles at Israel, while an additional 3,500 U.S. troops deployed to the region, according to NBC News.

President Donald Trump said Monday on Truth Social that the U.S. is in talks with what he called "a new, and more reasonable, regime" in Iran. In the same post, Trump threatened to obliterate Iranian power plants, oil wells, Kharg Island, and possibly all desalination plants if negotiations collapse and the Strait of Hormuz — a chokepoint accounting for roughly 20% of global oil flow — stays blocked.

Aboard Air Force One late Sunday, Trump told reporters the two sides "will make a deal," according to NBC News. Trump said Tehran had accepted most terms of a 15-point U.S. proposal — though Iran had not publicly acknowledged the claim — while also predicting 20 boatloads of oil would begin moving through the strait on Monday. Trump separately told The Financial Times the conflict could end "fairly quickly."

AAA recorded a national gasoline average of $3.99 a gallon Monday, the steepest pump price since the summer of 2022. Diesel had reached $5.42 a gallon by Sunday, 44% above its pre-war level, according to The New York Times. Patrick De Haan, Gas Buddy's chief analyst, estimated U.S. motorists would soon have racked up an additional $10 billion in gasoline costs since fighting began. Bloomberg News reported that government officials and financial analysts are now weighing the possibility of crude reaching $200 a barrel.

U.S. stocks opened higher, with the Dow Jones Industrial Average up about 215 points, or 0.5%, in Monday morning trading. The S&P 500 was up slightly and the Nasdaq $NDAQ was flat. European markets edged higher, with the Stoxx 600 gaining 0.6%, even as equities across Asia retreated — Japan's Nikkei 225 fell 2.8% and South Korean stocks dropped 3%.

Monday's energy market moves echo a dynamic that took hold the prior week, when an all-caps Trump post on Truth Social asserting that direct talks were underway triggered a rally in futures and sent oil prices lower. The Wall Street Journal subsequently established that no direct U.S.-Iran contact had occurred — only back-channel efforts by regional go-betweens still searching for Iranian counterparts open to talks.

Mohammad-Bagher Ghalibaf, Iran's parliamentary speaker and a figure the U.S. has reportedly targeted for diplomatic outreach, wrote on X $TWTR ahead of Monday's open, telling American investors to invert every Trump statement about the war — treating presidential announcements as a contrary signal for trading.