Occidental Petroleum Corp (NYSE:OXY), Exxon Mobil Corp (NYSE:XOM) and Chevron Corp (NYSE:CVX) climbed 1.95%, 1.53% and 1.31% during Monday pre-market trading session after oil prices have skyrocketed to their highest point since January, sparking concerns about potential supply disruptions.

What Happened: The U.S. and Israel’s joint military action against Iran’s nuclear sites has sent shockwaves through the energy markets. This development, announced by President Donald Trump, has led to a surge in oil prices.

At the start of the week, oil prices experienced a significant increase, with both Brent and U.S. crude reaching five-month highs of $81.40 and $78.40, respectively.

However, prices later fluctuated and briefly turned negative during the European morning session. While geopolitical tensions have added a risk premium to oil markets, the Middle East conflict has not yet caused any direct disruption to oil supply.

Goldman Sachs predicted that oil prices could surge to $110 per barrel, but moderate to $95 per barrel in the fourth quarter of 2025.

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Why It Matters: The U.S.’s aggressive actions against Iran, a major oil producer, have significantly raised tensions in the region. This conflict, initially sparked by Israel’s extensive airstrikes, has put the global energy trade in the spotlight. Energy analytics firm Kpler has forecasted a sharp 7-10% increase in oil prices due to rising risk premiums. However, they also warn that this spike may be temporary.

Meanwhile, U.S. Secretary of State Marco Rubio has urged China to intervene and prevent Iran from shutting down the Strait of Hormuz, a crucial trade route for global crude oil. Rubio’s warning comes amid escalating tensions in the Middle East. The closure of the Strait of Hormuz would have severe implications for the global oil trade, potentially leading to further price increases.

Last week, Shell CEO, Wael Sawan had warned that if Iran shuts the Starit of Hormuz, it would cause a ‘huge impact’ on global trade, as finding an alternative would be difficult.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.