Global oil prices rose on Monday as geopolitical tensions intensified, with Brent crude reaching $89.20 per barrel.
Rising Geopolitical Risk and Crude Prices
Energy markets reacted sharply to the cooling of diplomatic prospects between the United States and Iran. Brent crude futures climbed to $89.40 per barrel before settling at $89.20 by 0229 GMT, while U.S. West Texas Intermediate crude futures rose 44 cents to $82.83 a barrel. This upward momentum follows a week in which both contracts gained more than 5% in value, driven by security incidents involving energy infrastructure and commercial vessels.
The market environment remains sensitive to any signals regarding the safety of shipping lanes. Oil prices have now rebounded almost completely from the lows seen in early August, as hopes for a more permanent resolution between the U.S. and Iran have faded and geopolitical risk premiums have returned to the market,
said Priyanka Sachdeva, head of market insights for Phillip Nova in Singapore.
However, analysts caution that the current price levels may hit a ceiling without further escalation. I see limited upside from here unless we get clear evidence of renewed aggression in the Strait of Hormuz, particularly material damage to tankers or oil infrastructure,
Sachdeva noted.
Shipping Shifts and the Strait of Hormuz
The Strait of Hormuz, a critical chokepoint for global oil transit, is seeing a fundamental change in how commercial vessels navigate the waterway. Recent maritime security assessments from UK Maritime Trade Operations indicate that repeated projectile strikes are forcing operators to abandon the southern route through Omani waters, which has been coordinated with U.S. naval guidance.
Instead, many vessels are rerouting toward the northern corridor, which is overseen by Iran’s Persian Gulf Strait Authority. Data provided by Kpler showed a stark reduction in activity, with only five vessels transiting the strait on Saturday and none registered for Sunday, compared to 31 vessels during the prior weekend. Overall, transit volumes remain approximately 90% below pre-conflict baselines.
The shift is not merely a matter of logistics but of risk management. Despite a brief recovery in late June, vessel traffic through the Strait of Hormuz remains significantly reduced,
according to the latest UKMTO overview, which describes the trend as risk avoidance rather than route substitution alone.
Targeted Attacks on ADNOC Tankers
The heightened risk environment is underscored by a series of incidents targeting vessels operated by the Abu Dhabi National Oil Company (ADNOC). The United Arab Emirates reported that a third ADNOC-affiliated tanker was struck on Friday, following similar attacks on two other vessels in the same area on Thursday evening. The UAE reported the Friday incident involved a vessel transiting the strait.
According to maritime reports, these projectile strikes frequently target engine rooms, creating a severe risk of propulsion loss in the narrow, high-traffic waterway. While the UAE has attributed the attacks to Iran, the incidents continue to complicate the broader geopolitical struggle over the strait’s control. Iranian Foreign Minister Abbas Araqchi stated that Iran has not decided to resume talks with the U.S. at this time, further signaling that the diplomatic impasse may persist.
For shipowners and energy traders, the situation remains precarious. While traffic through the strait has not ceased entirely, the combination of a suspended Traffic Separation Scheme continues to discourage normal passage. As Donald Trump has urged Americans to accept slightly higher gasoline prices while the conflict continues, the energy market is bracing for continued volatility tied to the security of the Persian Gulf.
