Oil prices experienced an uptick on Monday, driven by persistent concerns regarding potential supply losses stemming from shipping disruptions in the crucial oil-producing region of the Middle East, attributed to the ongoing U.S.-Israeli conflict with Iran. Brent crude futures increased by $1.71, representing a 1.6% rise, reaching $110.74 per barrel as of 0057. U.S. West Texas Intermediate crude futures increased by $0.71, representing a 0.6% rise, to reach a trading price of $112.25 per barrel. On Thursday, the final trading day preceding the Good Friday holiday, WTI settled with an increase exceeding 11%, while Brent experienced a rise of nearly 8% amid volatile trading conditions.
This marked their most significant absolute price increase since 2020, coinciding with U.S. President Donald Trump’s commitment to persist with attacks on Iran. The Strait of Hormuz, a critical conduit for oil and petroleum products originating from Iraq, Saudi Arabia, Qatar, Kuwait, and the United Arab Emirates, continues to face significant disruptions due to Iranian assaults on maritime vessels following the onset of hostilities on February 28. Due to the disruptions in supply from the Middle East, refiners are actively pursuing alternative sources for crude, especially for physical cargoes in the U.S. and the UK North Sea. Global buyers are engaging in aggressive bidding for Gulf Coast barrels, while Brent is experiencing an even more rapid rally,” noted the Schork Group in a client communication on Monday.
On Sunday, Trump intensified pressure on Tehran, threatening in a provocative Easter Sunday social media post to target Iran’s power plants and bridges on Tuesday if the strategic Strait of Hormuz remains closed. Nonetheless, certain vessels, such as an Omani-operated tanker, a French-owned container ship, and a Japanese-owned gas carrier, have traversed the Strait of Hormuz since Thursday, as indicated by shipping data. This movement underscores Iran’s strategy to permit passage for vessels from nations it considers amicable. The conflict appears poised to extend further, as Iran has formally communicated to mediators its unwillingness to engage with U.S. representatives in Islamabad in the near future. Consequently, attempts to establish a ceasefire have encountered significant obstacles, according to a report on Friday.
On Sunday, OPEC+, which includes certain members of the Organization of the Petroleum Exporting Countries along with allies like Russia, reached an agreement to implement a modest increase of 206,000 barrels per day for May. Nonetheless, that decision will predominantly remain theoretical, as numerous key producers within the group are constrained in their ability to increase output due to the ongoing conflict. Recent Ukrainian drone attacks on Russia’s Baltic Sea export terminal have led to disruptions in supply. Reports from the media on Sunday indicated that the Ust-Luga terminal recommenced loadings on Saturday following several days of interruptions.