Oil Prices Surge on Iran Threats, OPEC+ Output Boost

Oil prices rose sharply Monday morning as Iran threatened to attack U.S. forces escorting commercial vessels through the Strait of Hormuz, according to live market data. West Texas Intermediate (WTI) crude was trading at $104.73 per barrel, up $2.79 (2.74%). Brent crude traded at $111.80, up $3.63 (3.36%). The Bakken differential was $-3.42 per barrel versus WTI.

The price surge followed a direct warning from Iran's military, according to a report from OilPrice.com. Iran's Armed Forces stated Monday that any U.S. forces approaching the Strait of Hormuz would be attacked. This came after U.S. President Donald Trump launched "Project Freedom," a military operation to escort stranded vessels through the critical chokepoint. Oil prices had initially dropped on the announcement of the operation but reversed sharply higher after Iran's threat, OilPrice.com reported.

The escalating Middle East tensions are countering bearish pressure from a coordinated output increase by major producers. A statement posted on OPEC's website revealed that Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman decided to boost production in June, according to a Rigzone summary. The geopolitical risk premium, however, is currently outweighing the potential for increased supply.

For Bakken operators, the high absolute price for WTI provides strong revenue per barrel, though the wider-than-usual differential of -$3.42 indicates Bakken crude is selling at a discount to the benchmark. The robust price environment, driven by geopolitical uncertainty, supports continued drilling and completion activity in the Williston Basin. The conflict has "dramatically changed the outlook for the oil and gas industry in 2026, and quite possibly beyond," according to a separate Rigzone summary quoting Seplat Energy's rationale for raising its dividend.

Natural gas prices also saw a modest increase, trading at $2.81 per MMBtu, up $0.03. While secondary to oil in the Bakken, stronger gas prices improve the economics of associated gas production.

Market attention remains fixed on the Strait of Hormuz, through which roughly 20% of global oil consumption flows. Any disruption or direct military engagement there could trigger further volatility. The U.S. Central Command (CENTCOM) said its support for "Project Freedom" includes guided-missile destroyers, over 100 aircraft, and 15,000 service members, according to the OilPrice.com report.