Oil Prices Hold Steady Amid Hormuz Tensions and Supply Concerns
Oil prices remained stable in Asian trading on Monday after Donald Trump announced that the United States will lead an effort to assist ships stranded in the Strait of Hormuz.
Despite this support, crude markets faced pressure as OPEC+ moved to increase production quotas, even as supply disruptions continue due to the ongoing conflict involving Iran.
Crude Prices Supported by Ongoing Geopolitical Risks
While additional supply weighed on prices, losses were limited by the lack of progress toward a U.S.-Iran peace agreement. Rising geopolitical tensions continued to underpin the market.
Further support came from renewed concerns over global supply disruptions, including Ukrainian drone strikes targeting Russian energy infrastructure.
Brent crude futures for July edged up 0.1% to $108.32 per barrel, while U.S. West Texas Intermediate (WTI) crude remained largely unchanged at $101.87 per barrel.
US Moves to Assist Ships in Hormuz
Trump stated that the U.S. would begin operations to guide stranded vessels through the Strait of Hormuz, aiming to support neutral countries affected by the conflict.
Although specific details remain limited, U.S. officials indicated that the operation could involve significant military support. United States Central Command confirmed that resources may include naval destroyers, over 100 aircraft, and approximately 15,000 personnel.
It remains unclear whether the operation will involve direct military engagement.
Strait of Hormuz Disruption Impacts Global Oil Supply
Shipping through the Strait of Hormuz has been heavily disrupted since Iran effectively blocked the waterway earlier this year. The strategic channel is responsible for transporting around 20% of global oil supply.
Iran has stated it will keep the route closed until the U.S. lifts its naval blockade, while Washington has demanded that Iran reopen the channel and agree to a nuclear deal—leaving both sides at a diplomatic stalemate.
Ukraine Strikes Add to Supply Risks
Supply concerns extended beyond the Middle East after Ukraine launched drone attacks on Russian energy assets.
Targets included the Baltic Sea port of Primorsk, along with several oil tankers and energy facilities. These strikes are part of Ukraine’s ongoing strategy to weaken Russia’s energy revenues and limit its ability to finance military operations.
OPEC+ Increases Output Despite Market Uncertainty
In a separate development, OPEC+ announced plans to raise oil production by 188,000 barrels per day in June.
The decision follows the recent exit of the United Arab Emirates from the group, adding another layer of uncertainty to global oil supply dynamics.
