Oil prices dropped on Monday, trimming Friday’s strong gains, as weekend attacks between Israel and Iran did not affect major oil production or export infrastructure.
Brent crude fell 93 cents to $73.30 a barrel, while U.S. West Texas Intermediate dropped 99 cents to $71.99. Both benchmarks rose more than $4 in early Asian trading before losing ground. On Friday, they ended up 7% higher after surging over 13% at one point—their biggest jump since January.
The market remains focused on whether the conflict will impact oil flows through the Strait of Hormuz, a key route for global energy supplies. Around 18 to 19 million barrels of oil and fuel pass through the strait daily, accounting for about a fifth of global consumption.
Despite strikes on both sides, oil and fuel exports have not been interrupted. Some gas production has been affected. Iran suspended operations at its South Pars gas field following an Israeli strike, but the gas is used for domestic purposes. Israel also temporarily shut down its offshore Leviathan gas field last week.
Iranian missiles hit Tel Aviv and Haifa on Monday, while Israeli attacks on Sunday caused casualties. Military leaders on both sides urged civilians to take precautions.
Iran, a member of OPEC, produces about 3.3 million barrels per day and exports more than 2 million barrels daily. If Iranian crude exports are disrupted, China—the main buyer—may have to turn to other suppliers in the region or to Russian oil.
OPEC+ countries have spare capacity that roughly matches Iran’s production. Any shift in supply could impact freight costs, insurance premiums, and refining margins, especially in Asia.
In China, crude oil processing in May fell 1.8% from a year earlier, reaching its lowest level since August. The drop was due to maintenance at both state-owned and independent refineries.
U.S. President Donald Trump said Sunday he hoped for a ceasefire but believed some conflicts had to run their course. He confirmed continued U.S. support for Israel but did not say if he had asked Israel to pause its attacks.
Germany’s chancellor said G7 leaders meeting in Canada would seek a resolution to the conflict. Iran, however, told Qatar and Oman it is not open to a ceasefire while under Israeli attack.
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