Oil Surges as Israel Strikes Iran, Putting the Ceasefire Back in Doubt

Oil Surges as Israel Strikes Iran, Putting the Ceasefire Back in Doubt Brent jumped on Monday after Israel retaliated for weekend attacks, reviving war-premium fears, yet traders still see crude capped near $100. Oil prices surged on Monday (2026-06-08) after Israel launched retaliatory strikes against Iran, answering attacks Tehran mounted over the weekend (2026-06-06/07) and reviving fears that the fragile Middle East ceasefire is breaking down, Montel reported.⁷ That matters because the region pumps a large share of the world's seaborne crude and sits astride the Strait of Hormuz. The same war drove ICE Brent crude front-month up more than 55% earlier this year, from around $72 a barrel on 27 February to nearly $120 at its peak, CNBC reported.^6,7 The truce was shaky from the day it was struck. Trump announced a two-week ceasefire on Wednesday (2026-05-20), sending equities higher, with the S&P 500 closing up 2.5%.⁴ A day later it cracked. Oil rose 3% on Thursday (2026-05-21) as both Iran and Israel kept striking and energy flows through the Strait of Hormuz remained largely on hold, Montel reported.¹ Before the truce, the market had been whipsawing on every diplomatic headline. ICE Brent crude front-month fell 3.8% to $95.54 a barrel on Tuesday (2026-05-19) and US West Texas Intermediate dropped 6.1% to $92.85 as hopes of fresh US-Iran talks eased supply fears, the BBC reported.³ Two days earlier, on Monday (2026-05-18), Brent had traded near $111 after Trump warned Iran's "clock is ticking."⁵ For all that, crude keeps failing to hold three figures. That is the puzzle traders are now pricing. A Bloomberg Intelligence survey found participants increasingly expect oil to be capped near $100 over the next year, with a majority seeing ICE Brent crude front-month averaging $81 to $100 a barrel over the next 12 months.² The cap reflects how much idle supply and inventory sit behind the headlines. IEA chief Fatih Birol said all 32 member countries had agreed to release 400 million barrels of strategic stocks, and that the figure was "only 20%" of available reserves. "We have still 80% in our pocket," he said.³ The US Energy Information Administration projects American crude output climbing to a record 14.1 million barrels a day in 2027.² Demand destruction does the rest of the work. Respondents to the Bloomberg survey mostly expect global supply disruptions to average 3 million to 7 million barrels a day, with few anticipating outages above 10 million.² At those volumes, higher prices throttle consumption enough to keep the market from spiralling. The bullish counter is inventories. The IEA has flagged record stock depletion, and UBS projects global stockpiles could fall near a record low of 7.6 billion barrels by the end of May (2026-05-31).⁵ A thin buffer leaves less room to absorb a genuine Hormuz disruption, which is why every exchange of fire moves the price. Positioning is turning defensive rather than directional. About a quarter of those surveyed expect more hedging and risk management, against 15% who see opportunistic risk-taking, the Bloomberg survey showed.² That is a market bracing for volatility, not betting on a breakout. What happens next turns on Hormuz. Energy flows through the strait were already largely on hold during the late-May (2026-05-21) strikes, and Monday's (2026-06-08) Israeli retaliation puts them back in question.^1,7 If the waterway stays open, the $100 ceiling traders have penciled in probably holds. If a tanker or terminal is hit, the 55% rally from February's lows will look like a warm-up.^6,2