Oil prices moved higher on Monday as uncertainty over the reopening of the Strait of Hormuz continued to support supply concerns.
Fresh attacks claimed by Iran-backed Houthi militants against Saudi energy infrastructure also added to fears that disruptions could spread across key Middle Eastern export routes.
Oil Prices Rise as Hormuz Risks Persist
Brent crude futures rose 1.0% to $84.39 per barrel, while U.S. West Texas Intermediate crude gained 0.8% to $78.84 per barrel.
Both contracts eased from earlier session highs. However, Brent remained more than 5% higher over the previous three sessions.
Traders remain focused on negotiations surrounding the Strait of Hormuz, one of the world’s most important oil transit routes.
Iran and Oman Near Shipping Agreement
Iranian Foreign Minister Abbas Araghchi said over the weekend that an agreement with Oman to establish a new shipping route through the Strait of Hormuz was very close.
However, he warned that such an agreement would not immediately lead to a full reopening of the waterway.
That comment reduced expectations for a rapid recovery in disrupted energy shipments.
Iran has also ruled out direct negotiations with the United States for now, citing what it says are violations of an interim peace agreement reached in June.
Tehran Sets Conditions for Full Hormuz Reopening
Iran has repeated several conditions that it says must be met before the Strait of Hormuz can fully reopen.
These include an end to the U.S. naval blockade, the removal of sanctions and compensation for damage caused by the conflict.
Washington has said it remains involved in discussions over the management of the waterway. Tehran, however, disputes that claim.
The lack of a clear agreement has continued to restrict shipping activity through the key oil chokepoint.
An Abu Dhabi National Oil Co. tanker was also targeted in the strait over the weekend, adding to concerns over maritime security.
Houthi Attack Raises Saudi Supply Concerns
Regional tensions increased further after Iran-backed Houthi militants claimed responsibility for an attack on Saudi Arabia’s Jazan refinery near the Red Sea.
Saudi authorities later said that a fire at the Aramco facility had been extinguished following the incident.
The attack has increased concerns that the conflict could spread beyond the Strait of Hormuz and threaten alternative routes used for Middle Eastern oil exports.
Red Sea Shipping Risks Increase
Houthi militants have also claimed a wider attack against Yemen’s Saudi-aligned government.
The group was previously reported to have targeted a Saudi tanker in the Gulf of Aden and has also threatened vessels operating in the northern Red Sea.
These developments have raised fresh concerns about the security of major shipping routes used to transport crude oil and other energy products.
Oil Market Volatility Remains High
ANZ analysts noted that oil prices experienced another volatile week.
Prices initially fell sharply after the United States said it would temporarily pause attacks on Iran to allow negotiations over the reopening of the Strait of Hormuz.
However, crude recovered as traders realized that any reopening of the waterway could still include significant restrictions on vessels.
Oil prices also jumped on Friday after Iran’s semi-official Fars news agency reported attacks on hostile targets in the strait following explosions near Qeshm Island.
ADNOC said three of its tankers were attacked while passing through the Strait of Hormuz last week.
Black Sea Risks Ease Slightly
While risks remain elevated in the Middle East, some pressure eased elsewhere.
Ukraine agreed not to target certain non-Russian oil tankers and energy infrastructure in the Black Sea that is critical to Kazakhstan’s crude exports.
The Caspian Pipeline Consortium terminal has faced repeated attacks in recent weeks.
The facility handles roughly 1.8 million barrels per day of Kazakhstan’s oil exports, making any sustained disruption a significant risk for global crude supply.
Supply Risks Keep Oil Prices Supported
Oil markets remain highly sensitive to developments in the Strait of Hormuz, the Red Sea and the broader Middle East.
Any progress toward reopening major shipping routes could ease supply concerns and pressure crude prices lower.
However, continued attacks on tankers and energy infrastructure could keep geopolitical risk premiums elevated and support oil prices in the near term.
