Brent eyes record rise as US oil also climbs above $US100

Global oil prices closed higher on Monday, with Brent heading for a record monthly rise, and US crude futures settling above $US100 a barrel for ‌the first time since 2022.

The increases came after Yemeni Houthis widened the Iran war by launching their first attacks on Israel.

Brent futures settled up 21 cents, or 0.2 per cent, at $US112.78 a barrel. Earlier in the session, Brent ‌had climbed more than $US4 to a high of $US116.89. US West Texas Intermediate futures finished up $US3.24, or 3.3 per cent at $US102.88, its highest since July 2022.

Houthi rebels attack Israel

Israel's military said it intercepted two drones launched from Yemen on Monday, two days after Iran-aligned Houthis fired missiles at Israel for the first time since the start of the war. The Houthis have yet to target shipping in the Red Sea, which handles about 15% of global maritime traffic.

If the Houthis attack shipping and shut down the southern entrance to the Red Sea, it could drive prices up further.

Iran's effective closure of the Strait of Hormuz, ‌a chokepoint for roughly a ‌fifth of global oil and ⁠gas supplies, has sent oil prices up about 57% this month, the steepest monthly jump in London Stock Exchange Group (LSEG) data going back to 1988, exceeding gains made during the 1990 Gulf War.

US crude, meanwhile, has climbed by 53% for its biggest monthly gain since May 2020.

US reassures on supply, threatens new attacks

US Treasury Secretary Scott Bessent said on Monday the global oil market is well supplied, with more vessels travelling through the Strait of Hormuz.

US President Donald Trump warned on Monday that Iran's energy plants and oil wells would be obliterated if it did not open the Strait of Hormuz, after Iran described US peace proposals as "unrealistic" ⁠and fired waves of missiles at Israel.

Previously, Trump said he would pause attacks on Iran's energy network until ‌April 6. Trump has said the United States and Iran have been meeting "directly and indirectly" and that Tehran's new leaders have been "very reasonable".

In a bid to assuage investors, G7 finance leaders said on Monday they stood ready to take "all necessary measures" to safeguard energy market stability and limit broader economic spillovers from recent volatility. And in the United States, Federal Reserve Chair Jerome Powell said the US central bank could wait to see how the Iran war affected the economy and inflation, indicating that a rate hike may not be on the cards.