Oil prices advanced on Monday, climbing roughly 3% to a two-week high as stalled U.S.-Iran negotiations and continued disruptions in the Strait of Hormuz kept global supply conditions tight. Brent crude settled at $108.23 per barrel, up 2.8%, while U.S. West Texas Intermediate (WTI) rose 2.1% to $96.37.
The move extended Brent’s rally to six consecutive sessions, marking its longest streak since March 2025. The widening Brent premium over WTI reflects heightened global supply stress and is expected to support increased demand for U.S. crude exports.
Supply constraints remain the dominant driver. Flows through the Strait of Hormuz continue at a fraction of normal levels, with only a handful of vessels transiting daily compared to pre-conflict averages of more than 100. Ongoing enforcement actions, including the redirection of Iranian cargoes, have further limited available barrels to the global market.
Diplomatic developments remain uncertain. While discussions around a potential resolution continue, the lack of tangible progress has reinforced expectations that disruptions will persist in the near term. Estimates suggest that millions of barrels per day remain sidelined, tightening already constrained global balances.
The broader market impact is increasingly evident. Elevated crude and refined product prices are contributing to rising inflation concerns, particularly in Europe, where policymakers are weighing the implications for monetary policy. At the same time, refining margins remain elevated, reflecting strong demand for fuels amid constrained supply.
Looking ahead, oil markets remain highly sensitive to geopolitical developments and the pace of any recovery in Middle Eastern supply. In the absence of a clear resolution, the persistence of supply disruptions is likely to continue supporting prices and sustaining volatility.