Oil advanced after President Donald Trump called for the evacuation of Tehran as Israel vowed more strikes, keeping the market on edge about a potential escalation that could disrupt crude supply.

West Texas Intermediate was above $73 a barrel after climbing as much as 2.7% earlier. Futures swung between gains and losses on Monday in an $8 range before closing lower on signs Iran was seeking to deescalate the conflict sparked by Israel’s attacks on nuclear sites last week.

So far, however, Iran’s crude-exporting infrastructure has been spared and there are no signs that Tehran is seeking to escalate hostilities by blocking the Strait of Hormuz. Middle East producers ship about a fifth of the world’s daily output through the narrow waterway.

For now, most of the fallout has been confined to the shipping market. Navigation signals in Hormuz and the Persian Gulf are facing increasing interference that’s impacting positional reporting, according to the UK Navy, and some shipowners are reluctant to accept bookings in the region, citing safety concerns. Tanker rates also soared.

Oil prices still remains significantly higher than where they were before the attacks began, which prompted record volumes of producer hedging as well as futures and options changing hands. Morgan Stanley has hiked its price forecasts citing increased risk from the conflict.

Trump called for the evacuation hours after he urged Tehran to sign a deal to limit its nuclear program. It wasn’t clear if the US president knew of a fresh round of attacks that Israel may have planned on the city.

Israel said its taken control over much of Iran’s airspace and severely damaged key facilities used in its missile and nuclear programs since the assault was launched on Friday, sparking fears of widening conflict in a region that produces around a third of the world’s crude.

Prices:

  • WTI for July delivery climbed 2.1% to $73.28 a barrel as of 8:02 a.m. Singapore time.

  • Brent for August settlement rose 1.78% to $74.53 a barrel.

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