Crude oil prices climbed more than 2% on Monday as growing uncertainty surrounding diplomatic efforts to end the Iran conflict raised concerns over prolonged disruptions to global oil supplies. Brent crude settled up $2.35, or 2.65%, at $90.87 per barrel, while WTI gained $2.10, or 2.55%, to settle at $84.50 per barrel.
Market attention remained focused on the stalled efforts to reach an agreement between the United States and Iran and the continued restrictions on shipping through the Strait of Hormuz. Rhetoric from both sides intensified, with the United States maintaining pressure on Iran while Tehran warned that tensions could escalate if existing agreements are not implemented.
Shipping activity through the Strait of Hormuz remains severely constrained. Only five commodity vessels transited the waterway on Saturday and none were recorded on Sunday, compared with 31 during the previous weekend. The Strait normally handles roughly one-fifth of global oil and liquefied natural gas supplies, making the continued reduction in traffic a significant risk to global energy markets.
Regional producers are attempting to maintain crude deliveries through alternative arrangements. Saudi Aramco is offering some crude to Asian refiners outside the Strait of Hormuz, while ADNOC sold at least 14 million barrels of spot crude to Asian buyers at premiums in its latest tender.
Despite the sharp rise in geopolitical risk, oil prices remain caught between the possibility of further supply disruptions and the potential for a diplomatic resolution that could rapidly restore flows through the Strait of Hormuz. With shipping restrictions continuing and negotiations stalled, the market remains highly sensitive to any developments that could either deepen the supply disruption or accelerate a reopening of the waterway.