US crude fell more than 6% in Monday's trade, its worst in two years, as Israeli strikes failed to damage Iranian energy facilities over the weekend.
U.S. West Texas Intermediate (WTI) futures. fell 6.13% to close at $67.38 a barrel for the biggest daily loss since July 12, 2022 when the benchmark shed 7.93%. Futures for global benchmark Brent crude fell 6.09% to close at $71.42 a barrel.
Israel on Saturday attacked Iranian military installations in three regions in response to Tehran's previous ballistic missile launch.
Iran's Tasnim news agency reported that the attack killed four soldiers and damaged limited facilities as Israel avoided oil, nuclear and civilian areas.
However, the operations of Iran's oil industry continued as usual without interruption.
For weeks, markets have been bracing for Israeli retaliation following a direct Iranian attack and wider Middle East tensions continued to rise after an attack on Israel by Iran-backed Hamas on October 7 last year.
A key consideration for oil markets is direct engagement between the two sides, with fears of an attack on Iran's oil facilities rising in recent weeks.
According to the US Energy Information Administration, Iran accounts for up to 4% of the global oil supply.
