Oil steady as Hormuz traffic stalls

Oil prices started the week slightly higher as tensions around Iran and the Strait of Hormuz persisted and diplomatic efforts showed little progress. On Monday, Brent crude futures (UKOIL) were up 55 cents at $89.07 a barrel, while U.S. West Texas Intermediate crude (USOIL) traded 17 cents higher at $82.57. Earlier, Brent (UKOIL) had traded around $88.72 and WTI (USOIL) at $82.35 in late-night dealings, underlining relatively tight but not extreme price movements. The lack of major confirmed supply outages has kept gains in check even as geopolitical risks remain elevated.

Other price indicators point to a firm but cautious market tone. West Texas Intermediate has risen toward $85 a barrel after ending Monday 2.6% higher, while Brent has recently settled just below $91. The cluster of price readings shows crude trading in the upper-$80s to low-$90s range for Brent and low- to mid-$80s for WTI, suggesting that traders are pricing in a risk premium but not a severe disruption.

Shipping conditions through the Strait of Hormuz have tightened as the political impasse continues. Reports on Monday described oil tankers and container vessels at a standstill in the waterway, underscoring the operational challenges at one of the world’s most important energy chokepoints. Separate market updates noted that shipping through the strait remains restricted, contributing to the floor under crude prices and limiting the scope for a pullback.

Recent trading data show that both Brent and WTI had gained more than 5% last week following attacks on tankers operated by Abu Dhabi National Oil Company in the strait and on a Saudi Aramco refinery. Those incidents heightened concern about the security of energy infrastructure and shipping routes in and around the Gulf. The combination of heightened security risks and slower traffic has kept market participants focused on potential supply disruptions, even as no large-scale loss of barrels has been confirmed.

Diplomatic efforts to ease the crisis have stalled, reinforcing uncertainty around the outlook for both shipping and prices. Negotiations over the broader Middle East conflict and the status of the strait have reached a stalemate, with no significant breakthrough announced. A memorandum referenced by the U.S. leadership, signed in June, technically expired on Monday, and the two sides remain far apart on several issues, including arrangements for the Strait of Hormuz.

Amid this backdrop, Iran has stated that it is working with Oman on a plan to manage shipping through the waterway. At the same time, U.S. President Donald Trump has publicly threatened Oman, even as fully reopening the strait remains a key U.S. demand. The interplay between Iranian regional diplomacy and U.S. pressure on Gulf partners adds another layer of complexity for shipowners and traders navigating the route.

For now, oil markets are balancing heightened geopolitical risk against the lack of clear evidence of large, sustained supply losses. Prices have been supported by concerns over restricted Hormuz traffic, prior attacks on tankers and infrastructure, and the uncertainty created by expiring diplomatic frameworks. However, the fact that no major outage has been confirmed is helping cap further sharp gains.

This mix of factors has left sentiment in a cautious, mixed state. Traders continue to monitor developments in the Strait of Hormuz, any changes in Iran’s coordination with Oman, and signals from U.S. policymakers about their willingness to push for a rapid resolution. Until there is a clear shift in either shipping conditions or diplomacy, crude prices are likely to remain sensitive to headlines from the region.