Oil prices finished slightly higher on Monday after an early rally faded as traders weighed continued supply disruptions against renewed diplomatic efforts to reopen the Strait of Hormuz. Brent crude futures settled at $105.28 a barrel, up $0.96, or 0.9%, while WTI gained $0.19, or 0.2%, to settle at $92.60.

Prices initially jumped more than $4 a barrel after President Trump rejected an Iranian proposal aimed at reopening the Strait and ending hostilities. The gains faded as Qatar prepared to mediate separate discussions with Iranian and U.S. officials, raising the possibility that negotiations could resume.

Qatari mediators are expected to meet with Iranian Foreign Minister Abbas Araqchi and U.S. officials in New York on Monday or Tuesday. The discussions are expected to focus on a revised version of Iran’s seven-day proposal presented during last week’s United Nations General Assembly.

The physical oil market is showing some improvement, but supplies remain below normal. Kpler estimates crude exports from major Middle Eastern producers reached 12.8 million barrels per day in September, the highest level since the war began. Shipments through the Strait of Hormuz are expected to average approximately 7.4 million barrels per day this month, helped by increased Saudi and UAE exports.

Before the conflict, roughly 20 million barrels per day, or about one-fifth of global oil supplies, moved through the Strait. While traffic has increased, flows remain well below pre-war levels, keeping the market relatively tight.

Saudi Arabia has shifted some exports from the damaged Yanbu facilities to Ras Tanura on the Gulf. Saudi Aramco is also considering discounts on crude loaded off Oman to offset unusually high freight costs for buyers.

Diesel remains another major concern. U.S. officials are considering measures to reduce fuel prices, including broader use of red-dyed diesel, while Washington has also discussed restricting diesel exports. The possibility of an export restriction has pushed the Brent-WTI spread to its widest level since May, reflecting expectations that U.S. refiners could reduce crude processing if they are unable to move excess diesel overseas.

Global diesel supplies remain tight due to disruptions from the Middle East and Ukraine, along with export restrictions from Russia and China. Goldman Sachs warned that a further tightening in diesel supplies could spread quickly beyond Europe and Latin America, where U.S. diesel exports are particularly important.

The oil market remains focused on whether diplomatic efforts can restore normal flows through the Strait of Hormuz. At the same time, recovering Middle East exports are providing some additional supply, while the ongoing diesel shortage continues to create significant pressure in refined-product markets.

• Where: The Gaylord Opryland Hotel
• Attending: Brian Baker (239.297.4519)
• Conference Website

• Where: The Westin Galleria Dallas
• Attending: David Cohen (954-729-4774), and Curtis Chandler (239-405-3365)
• Conference Website

• Where: The Westin Galleria Dallas
• Attending: Brian Baker (239.297.4519)
• Conference Website