Oil prices rebounded sharply on Monday, rising around 6% as renewed tensions around the Strait of Hormuz and uncertainty over diplomatic progress reversed the prior session’s steep losses. Brent crude gained $5.10, or 5.6%, to settle at $95.48 per barrel, while U.S. West Texas Intermediate (WTI) rose $5.76, or 6.9%, to $89.61. The move higher follows a sharp selloff on Friday, when prices dropped on expectations of improved shipping access through the strait.
The latest gains were driven by escalating tensions over the weekend, including the seizure of an Iranian vessel by U.S. forces and subsequent threats of retaliation from Tehran. These developments have cast doubt on the durability of the ceasefire and the likelihood of near-term progress in negotiations.
With the current ceasefire set to expire soon, markets are increasingly focused on whether talks will resume and lead to a more lasting resolution. Uncertainty around a potential extension, alongside continued military posturing, has reintroduced a risk premium into prices.
Shipping activity through the Strait of Hormuz remains severely limited, with traffic running at a fraction of normal levels. The persistence of restrictions—effectively creating a dual blockade dynamic—continues to constrain global supply, reinforcing volatility in crude markets.
While some vessel movement has been recorded in recent days, flows remain inconsistent, and the path toward normalization is unclear. As a result, market sentiment remains highly reactive to geopolitical developments.
Despite the recent rebound, prices are still below the peaks reached earlier in the conflict. Longer term, even in the event of de-escalation, supply restoration is expected to be gradual, suggesting that prices may remain elevated relative to pre-conflict levels.
Overall, oil markets continue to be driven by shifting expectations around the conflict, with price direction closely tied to developments in negotiations, the status of the ceasefire, and the pace of recovery in global oil flows.