Oil prices retreated on Monday, erasing earlier gains after U.S. President Donald Trump called on other nations to assist in protecting the Strait of Hormuz, a vital artery for global oil and gas shipments.
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Brent crude futures fell 24 cents, or 0.23%, to $102.90 a barrel, after closing up $2.68 on Friday.
U.S. West Texas Intermediate (WTI) crude dropped $1.07, or 1.08%, to $97.64 a barrel, following a nearly three-dollar rise in the previous session.
Both benchmarks have surged by more than 40% this month to their highest levels since 2022, after Tehran halted shipping through the Strait of Hormuz due to U.S. and Israeli strikes on Iran. This disruption has cut off one-fifth of global oil supplies, marking the largest disruption on record.
President Trump stated he is demanding that other countries help protect this critical energy corridor, adding that Washington is in talks with several nations regarding surveillance of the passage. Trump mentioned that the U.S. is also in contact with Iran but expressed skepticism that Tehran is ready for serious negotiations to end the conflict.
Trump threatened further attacks on Iran’s Kharg Island, the country's main oil export hub, after striking military targets over the weekend. Tehran defied Trump's remarks, vowing further retaliation. Approximately 90% of Iranian oil exports pass through Kharg Island.
Following the attacks on Kharg, Iranian drones struck a major oil terminal in Fujairah, UAE. Four sources stated that oil loading operations in Fujairah have since resumed, though it remains unclear if operations have returned to normal. Fujairah, located outside the Strait of Hormuz, serves as an outlet for nearly one million barrels per day of the UAE’s flagship Murban crude, equivalent to about 1% of global demand.
The International Energy Agency (IEA) said Sunday that over 400 million barrels of oil reserves will soon begin flowing into the market—a record reserve drawdown aimed at combating price hikes caused by the war in the Middle East.
U.S. Energy Secretary Chris Wright said he expects the war between the U.S. and Iran to conclude within "the next few weeks," with oil supplies recovering and energy costs declining thereafter.
Source: Reuters
