Oil prices rose Monday, extending a sharp weekly rally, after fresh U.S. and Iranian attacks on vessels in and around the Strait of Hormuz stoked fears of prolonged disruptions to crude supplies through the key waterway. Tanker traffic through the strait has ebbed to its lowest level since May, while OPEC+ agreed to hold production steady in October.
As of 06:25 ET, Brent crude futures, the global benchmark, rose 0.4% to $96.64 a barrel, while U.S. West Texas Intermediate crude edged up 0.1% to $91.59 a barrel. Last week, Brent climbed 8% and WTI jumped nearly 10% as shipping through the Strait of Hormuz slowed.
Hormuz traffic slows to a crawl
Traffic through the strait has ebbed to its lowest level since May. Just two vessels transited the waterway on Saturday, followed by six on Sunday, and the 10-day moving average slipped to 10. Before the Iran war began in late February, roughly 125 large commodity vessels passed through the strait daily, around a fifth of all global tanker traffic.
Iranian authorities have signaled they plan to declare a restricted zone near the strait within days. The declaration follows a weekend in which U.S. forces struck and disabled three Iranian oil tankers, a move Washington called retaliation for an Islamic Revolutionary Guard Corps ballistic missile attack on two U.S. Navy warships in the region.
According to ING: "despite the escalation, oil continues to flow". The bank's analysts added that the crude oil market remains well-supported, with little sign of peace between the U.S. and Iran.
OPEC+ pauses its output increases
Meanwhile, OPEC+ said after a meeting on Sunday that it will keep oil production steady in October, pausing a six-month run of output increases as the group shifts focus to setting new production quotas for 2027.
Source: Investing.com
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