New Delhi [India], June 8, (ANI): Global crude oil prices rose more than 4 per cent after Israel and Iran exchanged strikes, threatening a fragile ceasefire even as Trump signalled that a peace deal isn't far away. The renewed conflict raised fears of a prolonged closure of the critical Strait of Hormuz.

Brent crude futures rose $4.42 or 4.47% to $97.15 a barrel, while U.S. crude futures were up $4.07 or 4.50% at $94.61 per barrel, according to Reuters.

The strikes between Iran and Israel plunged the volatile region further into uncertainty. Oil prices had fallen on Friday on hopes of the US and the Iranian regime getting close to a peace deal. Crude oil prices have flared since the start of the war in late February, rising as much as $120 per barrel during the peak of the conflict in March.

Iran fired missiles at Israeli targets on Sunday after it targeted Lebanon with air strikes. Israel retaliated with strikes on Iran, including on a petrochemical plant, despite Trump urging restraint and insisting that a deal is very close.

A durable ceasefire between Israel and Lebanon and immediate cessation of hostilities is one of the key demands of the Iranian regime for striking a peace deal with the US.

Meanwhile, OPEC+ decided to increase production by 188,000 barrels per day in July, approving a fourth hike in as many months. The decision to increase the output comes even as member countries have struggled to meet the production targets owing to the blockade of the Strait of Hormuz.

Higher crude oil prices have raised inflation fears in the US and other economies. Higher energy prices have threatened household budgets in the US, leading to a drop in consumer sentiment to an all-time low in May.

A stronger US jobs data released on Friday eroded hopes of a Federal Reserve interest rate cut this year. Newly appointed Fed chief Kevin Warsh will chair his maiden FOMC meeting on June 16-17.

Goldman Sachs expects the Federal Reserve to keep interest rates unchanged through 2026 and delay an interest rate cut until 2027, according to a Reuters report. (ANI)