Brent crude climbed to $89.40 a barrel on Monday as tanker traffic through the Strait of Hormuz collapsed to zero on Sunday, deepening concerns that the strategic waterway could face a sustained blockade.
Data from shipping analytics firm Kpler revealed that only five cargo-carrying vessels transited the strait on Saturday, with zero transits recorded on Sunday. By comparison, 31 vessels had crossed the waterway during the preceding weekend, underscoring the severity of the disruption.
Fading Hopes for US-Iran Talks
The price surge was driven both by the shipping data and by dimming prospects for a resumption of negotiations between Tehran and Washington. Iranian Foreign Minister Abbas Araghchi stated that Iran has not yet made a decision regarding the resumption of talks with the United States, according to Reuters.
In a related development, the United Arab Emirates accused Iran of involvement in an attack targeting a third vessel affiliated with state oil company ADNOC, further escalating tensions in the Gulf. The allegation adds to a string of incidents targeting energy infrastructure around the strait, which carries roughly 20% of global oil supply.
Weekly Gains Compound Supply Fears
Oil benchmarks posted their strongest weekly gains in weeks. FXCM reported that UKOil rose 7.5% last week to settle at $88.46 a barrel, while USOil gained 6.7% to $82.34. The advances reflected restored geopolitical risk premium after tanker attacks and stalled diplomacy.
The disruption has begun to ripple through the broader economy. European coal-fired power plants have surged to their highest output in years as countries scramble for alternatives to pipeline gas and seaborne LNG, while the UK faces a critical decision on the Rosebank oil field as energy security concerns mount.
What Happens Next
A sharp increase in US crude inventories and softer global demand-growth forecasts provide some counterweight to the rally, but analysts warn that a prolonged Hormuz disruption would simultaneously affect inflation, household spending and central bank policy across major economies. The Reuters poll of 31 analysts sees Brent averaging $85.22 a barrel for 2026, a forecast that may need revision if the shipping disruption persists.
The market will be watching closely for any signals from the OPEC+ meeting on whether production adjustments are forthcoming to offset the supply bottleneck.
Sources: Reuters; IranWire; FXCM; Kpler shipping analytics; OPEC
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