NEW YORK: Oil prices climbed to a two-week high on Monday and extended those gains on Tuesday as stalled talks between the United States and Iran and sharply reduced traffic through the Strait of Hormuz kept concerns over global supply firmly in focus. Brent crude settled up $2.90, or 2.8%, at $108.23 a barrel on Monday, its highest close since April 7, while U.S. West Texas Intermediate crude settled up $1.97, or 2.1%, at $96.37, its highest close since April 13.
The advance continued in early Tuesday trading, with Brent for June delivery rising to $110.55 a barrel and WTI for June climbing to $98.17 by 0638 GMT. The move followed a sixth straight daily gain for Brent and reflected continued market sensitivity to any disruption affecting flows from the Middle East, where the Strait of Hormuz remains one of the world’s most critical routes for crude oil and liquefied natural gas shipments.
Talks aimed at easing the conflict between the United States and Iran remained deadlocked, leaving the shipping corridor under severe strain. Before the conflict began on February 28, between 125 and 140 vessels typically transited the strait each day. In the latest 24-hour period, only seven vessels were recorded passing through, and none were carrying oil bound for the international market, underscoring how far traffic has fallen from normal operating levels.
Supply Route Remains Constrained
The disruption has also affected Iran-linked exports directly. Ship-tracking data showed six tankers carrying Iranian oil were forced back in recent days, with the diverted cargoes estimated at about 10.5 million barrels. The United States announced a blockade on Iran-related shipping on April 13, and vessel movements since then have reflected tighter restrictions across the waterway, which normally handles roughly one-fifth of global oil and gas consumption.
At the same time, isolated signs of movement through Hormuz did little to change the broader picture. A liquefied natural gas tanker managed by Abu Dhabi National Oil Co appeared off India after crossing the strait, according to ship-tracking data, marking a rare successful passage by a loaded LNG vessel since the conflict began. Even so, overall maritime activity remained far below typical levels, with hundreds of ships and thousands of seafarers still affected inside the Gulf.
Oil Market Focus Stays On Flows
For oil markets, the immediate issue remained physical availability rather than broader macroeconomic signals. The reduced pace of traffic through Hormuz has limited the movement of crude and gas from a region central to world energy trade, while the lack of progress in talks between the United States and Iran has kept the supply picture tight. That combination lifted risk premiums across crude benchmarks and sustained buying through the start of Tuesday’s session.
Brent’s rise above $108 a barrel on Monday, followed by its move above $110 in Tuesday trading, reflected how quickly prices have responded to evidence of constrained flows. WTI’s climb toward $100 reinforced the same pattern in the U.S. market as traders tracked the latest shipping data and the status of negotiations. With traffic through Hormuz still sharply reduced and no breakthrough in the standoff, oil remained anchored by the same supply disruption that drove the rally to a two-week high. – By Content Syndication Services.