Oil prices rose on Monday as renewed concerns over Middle East security injected fresh geopolitical risk into crude markets. Brent crude futures settled up 99 cents, or 1.5%, at $69.04 a barrel, while U.S. West Texas Intermediate gained 81 cents, or 1.3%, to $64.36.
The move followed a U.S. Department of Transportation advisory urging U.S.-flagged vessels transiting the Strait of Hormuz and the Gulf of Oman to stay as far as possible from Iranian territorial waters. The Maritime Administration warned that ships in the region have historically faced the risk of being boarded by Iranian forces, including as recently as early February, and advised eastbound vessels to remain close to Oman.
The advisory revived fears that tensions between the United States and Iran could escalate into supply disruptions. Roughly 20% of global oil consumption passes through the Strait of Hormuz, making the market highly sensitive to any perceived threat to shipping lanes. Analysts said crude trading is being driven less by fundamentals and more by shifts in geopolitical risk premium tied to Iran.
Earlier in the session, oil prices had extended last week’s losses after Washington and Tehran pledged to continue indirect talks following what both sides described as positive discussions. However, sentiment turned after Iran’s foreign minister warned over the weekend that Tehran would strike U.S. bases in the region if attacked, as U.S. naval forces continue to build up their presence.
Beyond the Middle East, traders also monitored efforts by Western governments to restrict Russia’s oil revenues. The European Commission proposed a broad ban on services supporting Russia’s seaborne crude exports, while Indian refiners — once the largest buyers of Russian oil — were reported to be avoiding April deliveries. Analysts said a sustained halt in Indian purchases would be structurally bullish for crude markets.
On the supply side, Kazakhstan’s Chevron-led Tengiz oil field has recovered to roughly 60% of peak output following earlier disruptions and is aiming to return to full production by late February. Meanwhile, a preliminary Reuters poll indicated U.S. crude inventories likely rose last week, while gasoline and distillate stocks were expected to decline.