Crude Oil Fluctuates as US and Iran Exchange Fire

Crude oil rose to the $92 per barrel mark on Monday, the highest in three months, and nearly 40% above levels from before the outbreak of the war in Iran to reflect expectations of prolonged periods of tight supply. Iran said it was close to agreeing on a tanker route through the Strait of Hormuz with Oman. The consistent hawkish rhetoric against the corridor by the US added to escalatory risks as the US and Iran continued to strike each others' military and commercial vessels. Energy Secretary Chris Wright said Washington would maintain its naval presence and blockade. A greater rebound to crude prices were prevented by major economies tapping on inventory to tame higher import turnover. The US SPR plunged to less than 290 million barrels, the lowest since 1982. On top of that, China significantly cut imports of crude oil and refinery runs in the country were cut by only 1.6 million barrels per day, indicating the cutback in crude consumption despite steady demand for refined product.

Crude oil fluctuated above $91 a barrel on Monday after surging 9.7% last week, as escalating tensions between Washington and Tehran raised fears of prolonged disruptions to energy shipments through the Strait of Hormuz. The US said it had struck three Iranian oil tankers over the weekend, destroying one, in retaliation for ballistic missile attacks on US Navy warships. Iran responded by threatening to establish a new restricted zone outside the strait, reportedly extending from the US Navy blockade line into parts of the Persian Gulf. Tehran also claimed to have targeted three tankers, although the reports could not be independently confirmed. US Energy Secretary Chris Wright said Washington would maintain its naval presence and blockade, aimed at limiting Iranian oil exports while supporting the safe passage of commercial vessels. Wright previously said that millions of barrels of crude were still moving through the Strait of Hormuz despite the escalating conflict.

Crude oil rose above $93 per barrel on Monday, approaching three-month highs as the US and Iran exchanged strikes in the Middle East, fueling concerns over prolonged disruptions to energy flows from the region. The US targeted three Iranian oil tankers over the weekend in retaliation for ballistic missile attacks on US Navy warships. In response, Tehran attacked oil tankers and other vessels linked to the US and would introduce a “restricted” maritime zone beyond the Strait of Hormuz in the coming days. Meanwhile, US Energy Secretary Chris Wright said the US would maintain its naval presence in the Middle East, including the blockade designed to curb Iranian oil exports and help ensure the safe passage of commercial vessels through Hormuz. Fighting between the two sides resumed last week after roughly a month of relative calm, pushing oil prices about 10% higher as markets reassessed geopolitical and supply risks.