Oil prices have surged over the past week as Washington and Tehran exchanged strikes, raising fears that any disruption in the Strait of Hormuz could hit global energy supplies. The waterway carries about a fifth of the world's seaborne oil.
Both Brent crude and US benchmark West Texas Intermediate extended gains after jumping more than four percent on Friday. Brent climbed above $91 a barrel, its highest level since June 11.
The latest rally followed another weekend of escalating hostilities, with the United States launching fresh strikes on Iranian targets and Tehran retaliating with attacks on military assets in the Gulf.
The rise in crude prices has revived concerns that inflation could remain elevated and delay interest rate cuts, though some analysts say broader economic conditions remain supportive.
"Markets are once again being forced to trade two seemingly contradictory stories on the same screen," Stephen Innes of SPI Asset Management said.
While higher oil prices have injected a fresh geopolitical risk premium into markets, Innes said easing US inflation and a softer labour market suggested the energy shock was unlikely to trigger a broader inflationary cycle.
Instead, he said, the bigger risk would be if elevated oil prices persist long enough to weaken consumer spending and slow economic growth.
