Oil prices advanced during Monday’s trading session in Asia, extending a recent rally driven by growing concerns over potential supply disruptions amid escalating tensions between Israel and Iran in the Middle East.

Although prices moved higher, they remained slightly below the peak levels seen on Friday, which followed Israel’s initial airstrikes on Iranian targets. Over the weekend, Iran retaliated with missile attacks against Israeli cities.

As of 21:01 ET, August futures for Brent crude increased by 0.5% to $74.59 per barrel, while West Texas Intermediate (WTI) rose 0.6% to $71.66 per barrel.

Conflict Escalation and U.S. Involvement Under Watch

The weekend witnessed a rapid succession of attacks from both sides, signaling little desire for de-escalation. Israel’s strikes targeted Iranian nuclear facilities on Friday, prompting Iran to launch missile attacks on key urban areas in Israel, including Tel Aviv.

This escalation has fueled speculation about stricter sanctions on Iranian oil exports and raised alarms about potential interruptions in the Strait of Hormuz, a vital corridor for oil shipments bound for Asia and Europe.

Focus now shifts toward the role of the United States. President Donald Trump indicated ongoing attempts to broker a ceasefire but also hinted that the two countries might have to “work things out” through conflict before a resolution is possible. He further warned Iran against any attacks on U.S. interests in the region.

Meanwhile, Iran pulled out of planned nuclear negotiations with the U.S. over the weekend, adding to geopolitical uncertainty.

Central Bank Decisions Loom Amid Market Uncertainty

While geopolitical tensions are currently the main factor influencing oil markets, the week ahead will also be shaped by several important central bank meetings worldwide.

The Bank of Japan is expected to announce on Tuesday, likely holding interest rates steady, with investors eager for any shifts in economic outlook. The U.S. Federal Reserve is set to maintain its current rate policy on Wednesday, with market watchers attentive for any hints regarding future rate cuts amid signs of easing inflation and economic slowdown.

Later in the week, China’s central bank will set its key lending rate, while monetary policy decisions from the Swiss National Bank and the Bank of England are also expected, potentially adding further volatility to global markets.