Oil prices rose Monday as President Donald Trump warned of possible strikes on Iran if Hezbollah continues attacks on Israel, sparking an immediate market reaction that pushed benchmark crude up several cents per barrel. Traders flagged heightened geopolitical risk, noting that any escalation could disrupt supply routes in the Middle East and pressure global energy markets, amid concerns over shipping lanes in the Strait of Hormuz.

The warning arrived as diplomatic channels opened for U.S.-Iran peace talks aimed at de‑escalating regional tensions. Officials in Washington emphasized that progress hinges on Tehran’s influence over proxy groups, while Tehran has not publicly responded to the U.S. stance. The talks, mediated by European allies, remain fragile, and market participants worry that renewed hostilities could derail negotiations and trigger broader sanctions on oil exporters.

Investors responded by tightening positions in energy ETFs, and oil‑related stocks saw modest gains. Analysts note that any flare‑up could lift crude by a few dollars, while a durable diplomatic breakthrough would likely suppress prices. Energy funds are adjusting exposure as volatility spikes. For now, the market treats Trump’s threat as a near‑term catalyst, keeping oil on an upward trajectory.