Oil prices surged on Monday after US President Donald Trump threatened renewed military action against Iran and warned that Washington could "take over" the Strait of Hormuz if ongoing negotiations with Tehran fail, reigniting concerns over global energy supplies.

Brent crude rose as much as 2.2% in early trading to $82.30 a barrel before easing slightly, while US benchmark West Texas Intermediate climbed above $78 a barrel. 

The gains came as investors weighed the possibility that tensions between Washington and Tehran could escalate despite ongoing diplomatic efforts aimed at securing a broader peace agreement and restoring stability in the Gulf region.

The Strait of Hormuz remains at the centre of market concerns. The narrow waterway linking the Gulf to international markets handles roughly one-fifth of global oil consumption and serves as a critical export route for major producers including Saudi Arabia, Iraq, the UAE, Kuwait and Iran.

Analysts note that a successful agreement between Washington and Tehran could ultimately have the opposite effect on prices. Improved relations, sanctions relief and the restoration of normal shipping operations could allow additional Iranian crude to reach international markets.