Oil prices rose on Monday as investors weighed the risk of a fresh escalation between the United States and Iran, with the Strait of Hormuz still largely shut and global inventories falling at a rapid pace.
Brent crude futures for July delivery gained 1.98% to $111.42 a barrel, while U.S. West Texas Intermediate futures for June climbed 2.43% to $107.98 a barrel, marking its highest level so far this month. The move reflected growing anxiety in energy markets that diplomatic efforts to ease the crisis in the Gulf are losing momentum.
Concerns deepened after U.S. President Donald Trump issued a renewed warning to Tehran over the weekend, as talks over a peace agreement and the reopening of the Strait of Hormuz remained deadlocked. The narrow waterway is one of the most important energy routes in the world, and any prolonged disruption could place additional pressure on crude supplies, shipping costs, and fuel prices.
Although a fragile ceasefire was reached in April, relations between Washington and Tehran remain tense. Iran has kept the strait mostly closed, while the Trump administration continues to block access to Iranian ports. The standoff has left traders alert to any sign that the region could return to direct conflict.
Before the war, nearly a fifth of the world’s oil and gas supply moved through the Strait of Hormuz, making it a crucial passage for producers in the Gulf and consumers across Asia, Europe, and other major markets. A longer closure would make it harder for refiners and importers to secure supplies at a time when global stockpiles are already under strain.
The International Energy Agency warned in its latest monthly update that oil inventories are being drawn down at a record pace as the disruption continues.
A separate report from UBS last week estimated that global inventories could approach all-time lows of 7.6 billion barrels by the end of May if demand remains broadly unchanged, adding to fears that another shock could push prices even higher.