Oil stocks surged on Monday, with Petroleo Brasileiro SA Petrobras (PBR.US) climbing over 4%, while Exxon Mobil (XOM.US) and Chevron (CVX.US) each gained nearly 3%. ConocoPhillips (COP.US), Occidental Petroleum (OXY.US), and BP (BP.US) all advanced more than 2%.

On August 31, international crude futures accelerated their intraday gains, with WTI crude briefly jumping 4% and Brent crude rising over 3.8% at one point during the session.

On the geopolitical front, U.S. forces struck two rocket launcher sites on Iran's Larak Island near the Strait of Hormuz on Sunday. This marks the first U.S. military action against Iranian targets in a month. In response, Iran's Islamic Revolutionary Guard Corps issued a statement saying it had launched missiles and drones to destroy technical and maintenance infrastructure at two U.S. airbases in Jordan, while also inflicting severe damage on enemy fighter positions.

Morgan Stanley released a report on Monday significantly raising its short-term oil price forecasts. The bank now targets Brent at $100 per barrel for the fourth quarter, up from its previous estimate of $75, while WTI was lifted to $96 from $76.