Brent oil settled above $100 for a third straight session, the longest such streak since August 2022, as investors weighed signs of ample near-term supplies against rising military threats to energy infrastructure across the Middle East.
The global benchmark edged down 2.8% in a choppy session on Monday, while West Texas Intermediate futures closed at $93.50 a barrel. The US and Iran both stepped up attacks on energy assets in the region, including a drone strike on the massive Shah natural gas field in the United Arab Emirates.
Traders also assessed global attempts to blunt the worst of an impending supply shock stemming from the US-Israeli war on Iran, from an imminent release from the US emergency stockpile to a trickle of ships passing through a key transit point, the Strait of Hormuz.
While that has eased concerns about an immediate hit from locked-up Middle Eastern barrels, traders still expect the disruption to be severe.
The commodity extended losses in post-settlement trading on an Axios report that a direct communications channel between the US and Iran has been reactivated in recent days.
During regular trading, US President Donald Trump said the US is “hammering” Iran’s capacity to threaten commercial shipping through the Strait and reiterated appeals to other nations to help secure the passage. The waterway typically handles a fifth of global oil flows but has been effectively closed by Iran since the war began late last month.
Oil markets continue to feel the aftershocks of the most volatile week for the global Brent benchmark on record. Daily trading ranges have been far wider than usual as the tumult in the Middle East creates what the International Energy Agency has described as the largest supply disruption in the history of the global oil market.
“The Hormuz closure is turning a shipping disruption into a true global supply loss as storage in the region fills and upstream shut-ins rise,” Morgan Stanley analysts including Martijn Rats and Charlotte Firkins wrote. The bank raised its forecast for the second quarter to $110 a barrel.
A few vessels started to find a way through the waterway. Over the weekend, a Greek shipowner sent a vessel with its signal switched off, while a Pakistani oil tanker also appears to have made the perilous journey. India is in talks with Iran to ensure safe passage for six tankers carrying liquefied petroleum gas.
Meanwhile, the US Energy Department is preparing to release the first tranche of a planned 172 million-barrel discharge of emergency crude reserves. The transactions with refiners will take the form of exchanges that the companies must return with interest.
West Texas Intermediate’s prompt spread – the difference between its two nearest contracts – narrowed to sit at roughly $1.06 a barrel, a sign that traders are anticipating ample near-term supplies. Just over a week ago, it stood at $6.46.
Oil Prices
Brent for May settlement lost 2.8% to settle at $100.21 a barrel in New York.
WTI for April delivery fell 5.3% to settle at $93.50 a barrel.
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