Brent and WTI both jumped more than 3% on Monday as the weekend’s escalation revived the market’s Hormuz risk premium, though the relatively contained size of the move suggests traders are not yet pricing a full collapse of the interim truce. Analyst views are split, with one flagging doubt that a swift resolution is still possible after the weekend’s escalation, while another argued the muted price reaction reflects a market view that this is an escalation within a fragile ceasefire rather than its complete breakdown. Conflicting transit data is adding to the uncertainty facing traders: Kpler shiptracking showed just six vessels crossing the strait on Sunday, the lowest in five weeks, while a US official cited to Axios put the true flow closer to 20 vessels coordinated with the US military plus others moving independently. With the IEA noting global supply is still 9.4 million bpd below pre-war levels despite a June rebound, any sustained disruption signal, even a disputed one, carries outsized price impact.
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Oil surges as no one can quite agree on how much traffic is actually moving through Hormuz.
Summary:
- Brent and WTI crude futures both rose more than 3% on Monday as Iran expanded strikes on Gulf states following US attacks, threatening energy shipments through the Strait of Hormuz, according to Reuters.
- President Donald Trump said on Sunday the Strait of Hormuz remains open to commercial traffic, despite Iran’s declaration that it had closed the strait after striking a vessel travelling an unapproved route, per Reuters.
- Shiptracking data from Kpler showed just six vessels transited the strait on Sunday, the lowest number in five weeks, according to Reuters.
- A US official told Axios that around 20 commercial vessels transited the strait in coordination with the US military over the prior 24 hours, in addition to several vessels that moved without US coordination.
- The Joint Maritime Information Centre said the route along the Omani coastline remains available for transit, and a Chinese tanker was separately reported to have crossed via an Iran-designated route, according to Reuters.
- The International Energy Agency said in its monthly report that global oil supply rose by 4.1 million barrels per day in June but remained 9.4 million bpd below pre-war levels, Reuters reported.
- Analysts offered differing views on the significance of the flare-up, with one cited by Reuters suggesting hopes for a quick resolution may be in doubt, while another argued the market’s tame price reaction indicates traders see the escalation as occurring within a fragile truce rather than its collapse.
Oil prices jumped more than 3% on Monday after Iran expanded strikes on Gulf states in response to US attacks, reviving fears over energy shipments through the Strait of Hormuz even as conflicting reports emerged over how much traffic is actually moving through the waterway, according to Reuters.
Brent crude futures and US West Texas Intermediate crude both climbed more than 3% following a weekend in which Tehran extended strikes to Qatar and the United Arab Emirates while the US launched further strikes on Iran, the latest exchange in a cycle of attacks over control of the strait. President Trump said on Sunday that the Strait of Hormuz remains open to commercial traffic, directly at odds with Iran’s declaration that it had closed the waterway after striking a vessel that had travelled an unapproved route.
Data on actual transit volumes has proven similarly contradictory. Shiptracking figures from Kpler showed only six vessels crossed the strait on Sunday, the lowest number in five weeks, pointing to a significant slowdown. However, a US official told Axios that around 20 commercial vessels had transited the strait in coordination with the US military over the preceding 24 hours, with several more moving through without US coordination, a figure that would suggest traffic far closer to normal levels. Separately, the Joint Maritime Information Centre said a route along the Omani coastline remains available for transit, and a Chinese tanker was reported to have crossed via a route designated by Iran.
The escalating strikes and the conflicting picture on shipping flows have cast further doubt on the future of an interim US-Iranian agreement signed last month, which had aimed to reopen the strait and end the war following a further 60 days of negotiations. That agreement had already delivered some relief to global supply, with the International Energy Agency saying in its monthly report on Friday that global oil supply rose by 4.1 million barrels per day in June, though output remained 9.4 million bpd below pre-war levels.
Analysts remain divided on how to interpret the latest flare-up. One analyst said hopes of a relatively quick resolution to the skirmishes may now be in doubt following the weekend’s escalation. Another took a more measured view, arguing that the relatively contained size of Monday’s price rise suggests the market regards the current flare-up as an escalation occurring within a still-fragile truce, rather than evidence of a complete collapse of the ceasefire, though that assessment remains far from settled.
This article was written by fl6553e4b45d84486a91658a8b3f02bf22 at investinglive.com.
