Oil prices surged on Monday as fresh military strikes erupted between the United States and Iran, reviving fears of a prolonged disruption to global energy supplies through the strategic Strait of Hormuz, while energy giants Chevron and Halliburton moved closer to a major investment deal in Venezuela [citation:1][citation:3].
Brent crude futures climbed 2.94% to $90.69 a barrel, while West Texas Intermediate advanced nearly 3% to $85.77, marking the fourth consecutive session of gains for crude oil futures [citation:1][citation:3]. The escalation came as US forces struck Iranian rocket launchers on Larak Island in the Strait of Hormuz, with Iran retaliating by firing missiles at US military installations in Jordan [citation:1].
Will Brent crude hit $100 before the end of September?
3,841 votes castU.S.-Iran Military Escalation Sparks Supply Fears
The US military struck two rocket launcher sites on Iran's Larak Island on Sunday, marking the first direct military action against Iran in a month, according to US Central Command [citation:1]. Iran's Islamic Revolutionary Guard Corps responded within hours, firing missiles at US military installations in Jordan [citation:1].
The conflict has already delivered a significant shock to the world economy, with the Strait of Hormuz remaining the critical chokepoint. The strait's passage has only recovered to 10-15% of pre-conflict levels, meaning global crude supply remains suppressed [citation:3]. This is reflected in US gasoline prices, which averaged $4.09 per gallon on Friday, up 27% from $3.21 a year ago [citation:2].
Trump Announces Historic Venezuela Oil Deal
In a separate development that could reshape global energy markets, President Donald Trump announced a "historic" oil agreement with Venezuela that would give the US majority control over more than 65 billion barrels of proven oil reserves, describing the deal as the "largest in world history" at no cost to taxpayers [citation:2].
• Venezuela granted 100-year extraction rights to a joint venture involving 63 billion barrels of reserves [citation:2]
• US government holds 55% stake through equity and cost-price crude rights [citation:2]
• Joint venture would become world's second-largest oil reserves holder [citation:2]
• Deal negotiated by Secretary Marco Rubio and Venezuela's Delcy Rodriguez [citation:2]
• Agreement comes as Chevron nears $ billions investment in Venezuelan fields [citation:1]
Chevron is reportedly close to an agreement to add two heavy-oil fields to its portfolio in Venezuela, with Halliburton also in talks to introduce its full equipment suite to the country [citation:1][citation:2]. The deal marks a dramatic shift for Venezuela, which has been operating under a new government following the January US military operation to detain former President Nicolas Maduro [citation:2].
Chevron +2.9%, Exxon Mobil +2.8%, Halliburton +3.4%, Marathon Oil +1.6%, Valero +2.4%, Occidental +2.5% [citation:3]
Venezuela Deal: Opportunities and Obstacles
While the deal presents significant opportunities, analysts remain cautious about its viability. Exxon Mobil CEO Darren Woods has stated that Venezuela presents "opportunity" but currently lacks "investment-grade conditions," citing previous nationalizations [citation:2].
Legal and political hurdles also remain significant. Goldwyn Global Strategies president David Goldwyn noted that "no precedent exists for the US government to operate oil fields through lease agreements," questioning whether the framework complies with Venezuela's constitution and new oil law [citation:2].
Meanwhile, Venezuela is reportedly considering leaving OPEC, which would free the country from production quota constraints and allow it to more freely partner with US companies on expansion projects [citation:2].
Key Levels to Watch
What's Next for Oil Prices?
Analysts expect Brent to remain within the $85-95 range, but the risk has clearly shifted toward the upper end [citation:1]. The outlook depends on several critical factors:
- Military Developments: Any further escalation with Iran could push prices toward $100
- Venezuela Production: If the deal materializes, it could add substantial supply over time
- Strait of Hormuz Flow: Current passage remains limited to 10-15% of pre-war levels [citation:3]
- US Strategic Petroleum Reserve: Below 300 million barrels and under pressure [citation:2]
- Midterm Elections: Energy prices are a key political variable with elections just months away [citation:2]
Quick Summary
| Brent Crude | $90.69 (+2.94%) |
| WTI Crude | $85.77 (+2.90%) |
| Key Catalyst | U.S.-Iran military escalation |
| Hormuz Flow | 10-15% of pre-war levels |
| Venezuela Deal | 65B barrels, US majority control |
| Market Sentiment | Bullish (65%) |
| Upside Target | $93 - $100 |
| Downside Risk | $85 - $88 |
Bottom line: Oil markets are caught between two powerful forces: escalating U.S.-Iran tensions squeezing supply through the Strait of Hormuz, and a historic US-Venezuela deal that could eventually unlock massive new production. Brent's surge above $90 reflects immediate geopolitical fears, but the Venezuela agreement represents the most significant potential supply-side development since the Iran war began. Traders should monitor military developments closely while tracking progress on the Venezuela deal, which could reshape global energy markets for years to come.
What's Your Outlook on Oil?
The Venezuela deal is a game changer if it holds. But political risk is massive. Watching Chevron closely.
38 likesStrait of Hormuz at 10-15% of pre-war flow is the real supply story. $100 Brent is coming.
29 likesThe Venezuela deal could add 500k bpd within 18 months. That's what will eventually bring prices down.
22 likes