Brent Crude Tops $90 as Reports Show Reduced Strait of Hormuz Shipping Activity

Oil prices climbed on Monday, with Brent crude rising $2.69 (3.05%) to $90.79 per barrel, its highest level since June 11, while WTI crude gained $2.19 (2.65%) to $84.68, the highest since June 12. The gains came as geopolitical tensions in the Middle East continued to influence energy markets.

Both benchmarks extended last week's strong advances. Brent rose 15.9% during the previous week, its largest weekly gain since April, while WTI gained 15.5%, marking its strongest weekly performance since early March.

According to official statements and media reports, military activity involving the United States and Iran continued over the weekend. Reports also indicated additional attacks affecting parts of the Gulf region, while the UK Maritime Trade Operations (UKMTO) said a vessel caught fire northwest of Kumzar, Oman.

Shipping data also pointed to reduced traffic through the Strait of Hormuz. According to LSEG, four vessels transited the waterway on Sunday, compared with eight the previous day. Since Friday, the data showed at least three oil products tankers and one Very Large Crude Carrier entering the strait to load cargo. The Strait of Hormuz normally handles around one-fifth of global seaborne oil trade.

Barclays analyst Amarpreet Singh said the coming days would provide greater clarity on the region's export capacity under the current disruptions. He added that markets may be underestimating the potential impact on inventories, noting that global oil stockpiles are at their lowest level in approximately five years.

Market implications

Developments in the Strait of Hormuz have remained an important focus for commodity markets because the route plays a significant role in global energy supply. Market participants are also assessing the potential implications for fuel prices, natural gas markets, inflation expectations, and broader financial market sentiment.