Brent crude surged more than 2% on Monday to settle near $91 a barrel after Iran ruled out extending its truce with Washington and President Donald Trump threatened to bomb Oman over talks on managing the Strait of Hormuz. Ship traffic through the strait remains near a standstill, and U.S. emergency oil stocks have dropped to their lowest level since the end of 1982.
Brent crude settled 2.7% higher at $90.87 a barrel on Monday. U.S. WTI crude gained 2.6% to close at $84.50, after the memorandum of understanding between Washington and Tehran over the Strait of Hormuz expired without renewal. Iran's Foreign Ministry ruled out talks to extend the deal. Trump also threatened to bomb Oman if it stood in the way of talks over the strait, telling Fox News: "If Oman gets in the way, we'll bomb the s— out of them."
Brent extends its weekly rally
Monday's gain builds on a nearly 6% jump last week for Brent. WTI advanced more than 5.5% over the same stretch. The rally in crude oil tracks the ongoing standoff between Washington and Tehran over the strait.
Iran shifts posture, Trump rules out extension
Trump said Monday he was not seeking to extend the truce with Iran. A senior Iranian official told Reuters that Tehran would shift to offense rather than defense if diplomacy with Washington fails.
Shipping through Hormuz remains near a standstill
Kpler data showed just three vessels crossed the strait on Sunday, with the five-day average for crossings at 12. Weekly crossings had already fallen 19.5% to 95 ships, a fraction of the more than 130 vessels that once transited the strait daily before the war began.
U.S. emergency reserves hit lowest level since 1982
Away from the Middle East, Strategic Petroleum Reserve stocks fell 5.3 million barrels in the week of Aug. 14 to 293.4 million barrels, the lowest level since the end of 1982. The drawdown comes even as OPEC and the International Energy Administration both cut their 2026 demand forecasts last week, though supply worries from the conflict overshadowed the weaker outlook.
Energy Secretary Chris Wright told Fox News the U.S. is playing the long game with Iran, signaling no near-term de-escalation. Arne Lohmann Rasmussen, chief analyst at Global Risk Management, said easing military pressure in favor of economic sanctions is capping oil's further upside, even as the standoff over Hormuz keeps traders on edge.
Sources: Investing.com, CNBC, Rigzone
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