Oil Holds Gains as Mideast Tensions Persist

Crude oil traded above $82 per barrel on Monday, holding onto last week’s gains as tensions in the Middle East remain elevated, keeping markets wary of further supply disruptions. Over the weekend, Israel launched fresh strikes on Lebanon that killed 11 people, including a senior Hezbollah commander. President Donald Trump is also preparing new economic sanctions aimed at forcing Iran to surrender, as pressure mounts on his administration to bring the military campaign to an end. The interim ceasefire agreement between the US and Iran is set to formally expire later today, while negotiations to end the conflict and reopen the Strait of Hormuz remain deadlocked. Meanwhile, Middle Eastern producers are covertly moving millions of barrels of crude through the waterway, helping to limit further price gains. Iran and Oman also appear to be moving closer to an agreement on how to manage the Strait of Hormuz, although the US is not participating in the talks.

Crude rose above $82 a barrel on Friday, extending gains to more than 5% this week as the US increased economic pressure on Iran to reopen the Strait of Hormuz. Treasury Secretary Scott Bessent said Washington would impose unprecedented economic measures while maintaining its naval blockade of Iranian ports, with further announcements expected next week. The International Energy Agency also warned of a deeper global supply deficit, forecasting the widest shortfall in 2026 in five years. Meanwhile, Iran and Oman have yet to reach an agreement on reopening Hormuz, despite earlier optimism that a deal was close. US officials said American forces are increasing their ability to escort vessels through the strait, although shipping remains risky, with some tankers switching off transponders. In the Red Sea, Iran-backed Houthi militants also targeted Saudi Arabia’s Jazan refinery. Meanwhile, additional Middle Eastern crude is expected to reach the US, offering some relief to low inventories.

Crude oil was above $81 a barrel on Friday, gaining nearly 5% this week as the US increased economic pressure on Iran to reopen the Strait of Hormuz. Treasury Secretary Scott Bessent said Washington would impose unprecedented economic measures while maintaining its naval blockade of Iranian ports, with further announcements expected next week. The International Energy Agency also warned of a deeper global supply deficit, forecasting the widest shortfall in 2026 in five years. Meanwhile, Iran and Oman have yet to reach an agreement on reopening Hormuz, despite earlier optimism that a deal was close. US officials said American forces are increasing their ability to escort vessels through the strait, although shipping remains risky, with some tankers switching off transponders. In the Red Sea, Iran-backed Houthi militants also targeted Saudi Arabia’s Jazan refinery. Meanwhile, additional Middle Eastern crude is expected to reach the US, offering some relief to low inventories.