Oil refinery flare ©Adobe Stock Images
Oil prices advanced more than 2% on Monday as markets continued to assess uncertainty surrounding the Strait of Hormuz after Iran maintained its conditions for reopening the waterway following US President Donald Trump’s rejection of Tehran’s proposal.
At 04:31 ET, November Brent crude futures were up 2.7% at $107.08 a barrel. West Texas Intermediate futures gained 2.4% to $94.66 a barrel.
Brent futures had risen approximately 18% during the month, including Monday’s increase, according to the source.
Negotiations Remain in Focus
Iran’s proposal provides for the Strait of Hormuz to reopen within seven days alongside the resumption of broader negotiations, subject to several conditions.
Those conditions include Washington lifting its naval blockade, reducing military pressure, removing sanctions on Iranian oil sales and agreeing to a ceasefire.
Iran has said it does not intend to change those requirements following Trump’s rejection of the proposal.
Trump has nevertheless said he expects negotiations with Iran to resume during the week, while Qatar has been acting as an intermediary in efforts to restart discussions.
Shipping through the Strait of Hormuz has declined substantially since the conflict began. Before the disruption, around one-fifth of global oil and liquefied natural gas supplies passed through the waterway.
Regional Attacks Add to Supply Uncertainty
Energy markets are also monitoring developments involving Iran-backed Houthi forces in Yemen following attacks against Saudi Arabia and commercial shipping in the Red Sea.
Saudi Arabia said on Saturday that it had intercepted two ballistic missiles and two drones launched by the Houthis. The announcement followed the interception of six missiles targeting Taif and the Yanbu area several days earlier.
The disruption to regional shipping has prompted Gulf oil producers to seek alternative routes for moving crude.
Oil Continues to Move Through Hormuz
Despite the reduction in overall shipping activity, some oil continues to pass through the Strait of Hormuz.
Trump said more than 20 million barrels had transited the waterway over the weekend, according to Axios.
The level and consistency of shipments through the strait remain under scrutiny as negotiations continue and producers adjust their export arrangements.
Diesel Supplies Remain Under Pressure
Refined-product markets are also being monitored as disruptions to oil and fuel exports from the Middle East and Russia affect supplies.
Diesel prices in Europe and the United States had reached record levels, according to the source, amid tighter availability.
Higher crude and refined-product prices can increase fuel and transportation costs. The extent of any broader inflationary effect would depend on how long elevated prices and supply disruptions persist.