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Oil prices climbed in volatile trading on Monday as markets reacted to escalating tensions after President Donald Trump issued an ultimatum demanding Iran reopen the Strait of Hormuz or face strikes on its energy infrastructure.
Tehran responded by warning it could target regional power plants and water facilities if its own electrical grid is attacked.
Brent crude for May delivery rose 1% to $113.32 per barrel, recovering earlier losses, while U.S. West Texas Intermediate gained about 2.8% to $101.01 during early European trading.
Goldman Sachs raised its oil price outlook, forecasting Brent to average $110 in March and April, up from $98, and WTI to reach $98 in March and $105 in April.
The bank said prices are likely to trend higher if Hormuz flows remain at just 5% of normal levels, citing supply risks and limited spare capacity. It added that prolonged disruption could push Brent above its 2008 record high of nearly $147 per barrel.