Oil prices retreated on Monday after several vessels resumed transit through the strategic Strait of Hormuz, easing some fears over a prolonged disruption to global supply routes.
Brent crude futures settled down US$2.93, or 2.8%, at US$100.21 a barrel. Meanwhile, US West Texas Intermediate crude fell US$5.21, or 5.3%, to close at US$93.50.
The pullback came after reports that some oil tankers had successfully sailed through the waterway, which carries roughly a fifth of the world’s oil and liquefied natural gas supplies. The development reduced some immediate supply concerns despite the ongoing conflict involving Iran.
Analysts at Ritterbusch and Associates said, “The (oil) complex is selling off … on reports that some oil tankers are proceeding through the Strait of Hormuz and as Trump appeals for help in escorting tankers through the strait.”
The price decline also reflected factors in the United States. Analysts noted that US crude prices fell more sharply than Brent partly due to near record domestic production, boosted by imports from Venezuela, as well as the upcoming release of crude from the U.S. Strategic Petroleum Reserve.
Some traders were also unwinding positions ahead of the April WTI front month contract expiry on the New York Mercantile Exchange on March 20.
Before Monday’s decline, oil benchmarks had surged sharply. Brent last Friday closed at its highest level since August 2022 while WTI reached its strongest level since July 2022, leaving both up nearly 40% since the United States and Israel attacked Iran on Feb 28.
Meanwhile, Donald Trump again urged other countries to assist in reopening the Strait of Hormuz and escorting tankers, though some allies have shown reluctance to expand military involvement in the region.
European Union foreign ministers currently have “no appetite” to widen an EU naval mission to the strait, according to Kaja Kallas, the bloc’s foreign policy chief.
Tensions around the waterway remain high. Iran has allowed some India linked vessels to pass through Hormuz but has requested India release three tankers seized in February as part of negotiations over safe passage.
Energy markets are also watching supply responses from major economies. International Energy Agency Executive Director Fatih Birol said member countries could release additional oil from strategic stockpiles if required after agreeing to a record 400 million barrel release last week.
Governments globally are trying to shield households and businesses from surging fuel costs as supply disruptions ripple through the global economy.
Military tensions remain a key uncertainty. Israel said it has plans for at least three more weeks of war, while Chris Wright, US energy secretary, said he expected the conflict to end within the next few weeks, allowing oil supply to stabilise and prices to ease.
Separately, loading operations were disrupted at an export facility run by Abu Dhabi National Oil Company after a drone strike triggered fires. However, sources said some loading activity later resumed at Fujairah, with two of the three single point moorings operational.
