Oil prices rose more than 2% on Monday as Iran maintained its conditions for reopening the Strait of Hormuz following US President Donald Trump’s rejection of Tehran’s proposal, leaving uncertainty over the timing of a broader resumption of shipping through the waterway.
At 04:31 ET, November Brent crude futures were up 2.7% at $107.08 a barrel, while West Texas Intermediate crude futures gained 2.4% to $94.66 a barrel. Earlier in the session, Reuters reported Brent at $105.64 and WTI at $93.11 as prices rebounded following Trump’s rejection of the Iranian proposal.
Including Monday’s increase, Brent futures were up approximately 18% for the month, according to the source.
Iran Maintains Conditions for Hormuz Reopening
Iran’s proposal would allow the Strait of Hormuz to reopen within seven days while broader negotiations resume, subject to conditions including a reduction in US military pressure and changes to economic restrictions. Iran has said it remains committed to its conditions despite Trump’s rejection of the proposal.
The plan was presented during the United Nations General Assembly in New York and transmitted to the United States through Qatari mediators. Trump rejected the proposal on Saturday but subsequently said he expected US negotiators to hold further discussions with Iran during the week.
Shipping activity through the Strait of Hormuz has fallen significantly during the conflict. Before the disruption, the waterway was a major route for global oil and liquefied natural gas supplies.
Houthi Attacks Add to Regional Supply Concerns
Developments in Yemen and Saudi Arabia have added another factor for energy markets, with Iran-backed Houthi forces carrying out attacks against Saudi targets.
Saudi Arabia said last week that it intercepted six ballistic missiles launched by the Houthis towards Taif and the Yanbu area. The Houthis subsequently said they had targeted a site in Riyadh and Saudi Aramco facilities in Yanbu.
A Greek-operated air-defence system in Saudi Arabia also intercepted a ballistic missile and a drone in the wider Yanbu region, according to Greek security sources.
Oil prices had already risen around 3% on Thursday as the attacks increased concerns about potential supply disruptions.
Gulf Producers Adjust Export Routes
Disruption to regional shipping has prompted Gulf producers to adjust crude export routes.
Saudi Arabia has increased exports from its eastern Gulf terminals while also working to restore flows through its East-West pipeline and the Red Sea port of Yanbu. The East-West pipeline provides an alternative route that can bypass the Strait of Hormuz.
At the same time, some crude has continued to move through Hormuz, leaving markets focused on the level and consistency of shipping activity as diplomatic discussions continue.
Refined Fuel Supplies Remain in Focus
Markets are also monitoring refined-product supplies as disruption to crude and fuel exports from the Middle East and restrictions affecting Russian products tighten availability in some markets.
Diesel prices have risen as a result of tighter supply conditions. Higher crude and refined-product prices can increase fuel and transportation costs, although their eventual impact on inflation depends on the duration and scale of the disruption.
With negotiations between the United States and Iran expected to continue, developments surrounding the Strait of Hormuz remain a factor for global oil supply and pricing.