Oil prices climbed by $3.14 to $87.72 a barrel on Monday as fears of disruptions to supply were enough to drive Brent up $3.14 to $87.72 a barrel.
The Israel and Palestinian territories are not oil producers. However, the Middle Eastern region accounts for almost a third of global supply.
Increasing geopolitical risk in the Middle East should support oil prices ... higher volatility can be expected" analysts from ANZ Bank said in a client note.
The surge in oil prices reversed last week's downtrend - the largest weekly decline since March - in which Brent fell about 11% and WTI retreated more than 8% amid concerns about high-interest rates and their impact on global demand.
The Israeli army said Monday it hit more than 500 targets in the Gaza Strip in overnight strikes, as the death toll from its war with Palestinian fighters surged above 1,100.
Prime Minister Benjamin Netanyahu had warned Israel to prepare for a "long and difficult" war after Hamas launched a surprise assault from Gaza on Saturday, firing a barrage of rockets and sending a wave of fighters who gunned down civilians and took at least 100 hostages.
More than 700 Israelis have been killed since Hamas launched its large-scale attack, the Israel Defense Forces (IDF) said on Monday.
Another 1,200 people have been wounded, many critically. In retaliation, Israeli air strikes have hammered the impoverished and blockaded Gaza Strip, an enclave of 2.3 million people, with officials there reporting at least 413 Palestinian deaths.
"Overnight IDF fighter jets, helicopters, aircraft, and artillery struck over 500 Hamas and Islamic Jihad terrorist targets in the Gaza Strip," the military said in a statement. Thick plumes of smoke billowed from the Palestinian enclave as the strikes continued in the early hours of the morning, an AFP correspondent reported.
IDF spokesperson Lieutenant Colonel Jonathan Conricus estimated around 1,000 Palestinian fighters had participated in Hamas's assault on Saturday, which he called "by far the worst day in Israeli history". "Never before have so many Israelis been killed by one single thing, let alone enemy activity in one day," he said.
"This could be a 9/11 and a Pearl Harbour wrapped into one." Around 100,000 reserve troops have been deployed to the south as the IDF battles to expel Hamas fighters from occupied territory, he said, adding that a "very large amount" of Israeli civilians and soldiers were being held inside Gaza.
Israel was stunned when Hamas launched its multi-pronged offensive on Saturday, the Jewish Sabbath, with at least 3,000 rockets raining down as fighters infiltrated towns and kibbutz communities and stormed an outdoor rave where many revelers were shot dead.
Panicked Israelis hiding in their homes told reporters that militants were going door to door and shooting civilians or dragging them away.
At least 100 citizens were captured by Hamas and abducted into Gaza, with images circulating on social media of bloodied hostages. Yifat Zailer, 37, said she was horrified to see video footage from Gaza that showed her cousin and the woman's children, aged nine months and three years. "That's the only confirmation we have," she told AFP, her voice breaking with emotion, and adding there was no information on her cousin's husband or her elderly parents.
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