Oil Prices Up 1% Amid Hormuz Uncertainty

Oil Prices Up 1% Amid Hormuz Uncertainty

Oil prices extended gains on Monday as supply‑risk concerns persisted. At 20:37 ET (00:37 GMT), Brent crude futures were up 1.1% to $84.45 a barrel, while U.S. West Texas Intermediate (WTI) futures rose 1.2% to $78.18 a barrel. The Brent price has climbed more than 5% over the previous three trading sessions.

Hormuz Reopening Uncertainty

Market focus remained on diplomatic efforts to reopen the Strait of Hormuz. Iranian Foreign Minister Abbas Araghchi said over the weekend that an agreement with Oman to establish a shipping route through the waterway was "very close," but he cautioned that any deal would not lead to an immediate reopening. Tehran has ruled out direct talks with the United States, citing alleged violations of the interim peace agreement reached in June, and reiterated that a full reopening would require an end to the U.S. naval blockade, removal of sanctions, and compensation for war damage. The United States, while denying a direct role, said it is involved in discussions on waterway management, a claim Tehran disputes. Consequently, shipping activity through the chokepoint remains constrained, and an Abu Dhabi National Oil Co. (ADNOC) tanker was also reported targeted in the strait over the weekend.

Houthi‑Claimed Attacks Heighten Geopolitical Risks

Iran‑backed Houthi militants claimed a fresh attack on Saudi Arabia’s Jazan refinery near the Red Sea; Saudi officials later confirmed that a fire at the Aramco refinery in Jazan was extinguished after the strike. The militants also asserted that three ADNOC tankers had been attacked while transiting Hormuz last week and that a Saudi‑aligned tanker in the Gulf of Aden was struck, threatening shipping in the northern Red Sea. In addition, the group said it carried out a large‑scale attack against Yemen’s Saudi‑aligned government.

Market Reaction and Analyst Commentary

ANZ analysts noted that oil prices endured a volatile week, initially falling sharply after the United States announced a pause in attacks on Iran to facilitate Hormuz talks, then recovering as it became clear that any reopening would still impose significant vessel restrictions. Prices also jumped on Friday following reports from Iran’s semi‑official Fars news agency of attacks on hostile targets in the strait after explosions near Qeshm Island.

Mitigating Factors

Some supply‑risk pressures eased after Ukraine agreed not to target certain non‑Russian oil tankers and Black Sea energy infrastructure critical to Kazakhstan’s crude exports. The Caspian Pipeline Consortium terminal, which handles roughly 1.8 million barrels per day of Kazakhstan’s exports, has faced repeated attacks in recent weeks, keeping that route vulnerable.