The increase came a day after the United States said it had attacked Iranian rocket launchers on a small island in the Strait of Hormuz, marking the first US strikes on Iran in a month.
Iran responded by firing missiles at US military targets in Jordan. US President Donald Trump said Washington would retaliate against the Iranian strikes, according to Fox News.
The latest exchange came as the US-Iran war reached its six-month mark. Hostilities had eased in recent weeks, but the weekend's escalation renewed concerns over the conflict and the prospects for peace talks.
The Strait of Hormuz has remained largely closed. Normally, around a fifth of the world's crude oil and gas supplies pass through the strategic waterway.
Oil traders said the renewed fighting highlighted how quickly geopolitical risks could push prices higher again after crude had declined for much of the previous week.
Meanwhile, Trump is due to meet oil refining executives on Tuesday as his administration seeks to bring down rising petrol prices in the United States. High fuel prices and persistent inflation have become a political challenge for Republicans ahead of the upcoming midterm elections.
Financial markets were also under pressure following hawkish comments from Federal Reserve chief Kevin Warsh, which strengthened expectations that US interest rates could remain higher or rise further.
All three major Wall Street indexes fell on Friday and declined further on Monday. The Dow Jones Industrial Average closed 0.7 per cent lower.
Investors are now awaiting US employment data due later this week. Strong jobs figures could reinforce expectations that the Federal Reserve will prioritise inflation and maintain tighter monetary policy.
Asian markets were mixed, while European stocks also showed a mixed performance. Paris gained, Frankfurt fell and London's market remained closed for a public holiday.
The US dollar weakened against major currencies, while long-term US Treasury yields remained elevated. The yield on the 10-year US Treasury note reached its highest level since January 2025.
