The greatest risk the oil markets face is that Iran retaliates against Israel airstrikes by closing the Strait of Hormuz, which is critical to global energy shipments.

Iran and Israel continued trading fire in a fourth day of armed escalations. "The residents of Tehran will pay the price, and soon," Israeli Defense Minister Israel Katz pledged following reported Iranian strikes against Tel Aviv and Haifa.

Oil prices climbed on Monday, extending Friday's rally, as renewed strikes by Israel and Iran over the weekend increased concerns that the battle could widen across the region and significantly disrupt oil exports from the Middle East.