Oil prices jumped above $100 per barrel on Monday as the U.S. Navy prepared to take control of shipping traffic in the Strait of Hormuz—a move that could restrict Iranian oil exports—following the failure of Washington and Tehran to reach an agreement to end the war.
Brent crude futures rose by $6.71, or 7.05%, to $101.91 per barrel as of 01:04 GMT, after closing down 0.75% on Friday.
U.S. West Texas Intermediate crude reached $104.16 per barrel, up $7.59, or 7.86%, following a 1.33% decline in the previous session.
Saul Kavonic, head of energy research at MST Marquee, said the market has largely returned to conditions seen before the ceasefire, except that the United States is now expected to block remaining Iranian oil flows—estimated at around 2 million barrels per day—through the Strait of Hormuz.
U.S. President Donald Trump said on Sunday that the Navy would begin enforcing control over the Strait, escalating tensions after prolonged talks with Iran failed to produce a deal, putting the fragile two-week ceasefire at risk.
He added that oil and gasoline prices could remain elevated until the midterm elections in November, acknowledging the potential political impact of his decision to strike Iran weeks earlier.
U.S. Central Command confirmed that American forces would begin controlling maritime traffic entering and leaving Iranian ports at 10:00 a.m. Eastern Time (14:00 GMT) on Monday.
In a statement on X, CENTCOM said the blockade would be applied “neutrally” to vessels of all nations entering or leaving Iranian ports and coastal areas, including those along the Arabian Gulf and the Gulf of Oman.
The statement emphasized that U.S. forces would not obstruct freedom of navigation for vessels transiting the Strait of Hormuz to non-Iranian ports.
Tony Sycamore, a market analyst at IG, said the move would effectively choke Iranian oil flows, forcing Tehran’s allies and customers to apply pressure to reopen the waterway.
Iran’s Revolutionary Guard warned on Sunday that any military vessels approaching the Strait would be considered a violation of the U.S. two-week ceasefire and would be dealt with firmly.
Despite the tensions, shipping data showed that three fully loaded supertankers passed through the Strait of Hormuz on Saturday—the first vessels to exit the Gulf since the ceasefire agreement last week.
Data from the London Stock Exchange Group also indicated that oil tankers have been avoiding the Strait ahead of the anticipated U.S. move.
On Sunday, Saudi Arabia announced it had restored full oil production capacity through its East–West pipeline to around 7 million barrels per day, days after assessing damage to its energy sector caused by attacks during the conflict with Iran.
Reuters
