Oil prices settled higher on Monday following a volatile trading session as investors weighed the possibility of renewed diplomatic efforts between the United States and Iran against escalating threats to Middle East energy shipments. Brent crude rose 1.3% to settle at $89.22 per barrel after reaching an intraday high of $91.42, while West Texas Intermediate (WTI) gained 0.9% to finish at $83.23 per barrel.
Market sentiment remained driven by geopolitical developments after continued military exchanges across the Gulf increased concerns over regional oil supplies. Reports that diplomatic channels remain active provided some optimism that tensions could eventually ease, helping to moderate gains despite ongoing conflict.
The security of Middle East shipping remained a key concern as new threats emerged against energy exports through both the Strait of Hormuz and the Red Sea. Vessel traffic through the Strait of Hormuz continued to slow, while attacks involving commercial tankers highlighted the elevated risks facing global shipping. Although Gulf producers have maintained relatively strong export volumes, the decline in transit activity has reinforced concerns over potential supply disruptions.
Analysts noted that geopolitical risks continue to support crude prices, but exceptionally high volumes of oil already stored aboard tankers worldwide could help cushion the market against short-term supply interruptions. As a result, while uncertainty surrounding Middle East shipping remains elevated, ample floating inventories may limit the extent of further price increases unless disruptions become more widespread or prolonged.