Brent futures were down 0.8% to $73.65 a barrel by 11h00 CAT, while United States (US) WTI futures were off 0.7%, to $72.47.  Both benchmarks jumped more than $4 a barrel in Asian trading before giving back gains. They settled 7% higher on Friday, having surged more than 13% during the session to their highest levels since January.

"It all boils down to how the conflict escalates around energy flows," said Harry Tchilinguirian, group head of research at Onyx Capital Group.

"So far, production capacity and export capacity have been spared and there hasn't been any effort on the part of Iran to impair flows through the Strait of Hormuz."

Iranian missiles struck Israel's Tel Aviv and the port city of Haifa on Monday, destroying homes and fuelling concerns among world leaders at this week's G7 meeting that the conflict could widen.

An exchange of strikes between Israel and Iran on Sunday resulted in civilian casualties, with both militaries urging civilians on the opposing side to take precautions against further attacks.

--Reuters--