Oil markets opened the week still simmering from the weekend’s dramatic escalation in the Gulf, with crude prices hovering near six-week highs after a fresh round of tit-for-tat strikes on commercial vessels in and around the Strait of Hormuz threatened to choke off one of the world’s most vital energy corridors.
By 08:22 GMT, Brent crude futures had eased slightly, down 9 cents, or 0.1%, to $96.19 a barrel, a modest pullback after the contract touched $97.93 earlier in the session, its highest level since July 24. U.S. West Texas Intermediate crude told a similar story, slipping 45 cents to $91.03 a barrel while still holding near its own recent six-week peak.
The dip on Monday did little to offset the scale of last week’s surge: Brent climbed roughly 8%, and WTI nearly 10% as the conflict between Washington and Tehran reignited in earnest.
The renewed hostilities came to a head on Saturday, when U.S. forces struck three Iranian oil tankers, according to U.S. Central Command, among them a vessel near Kharg Island, the linchpin of Iran’s crude export infrastructure and a target whose symbolic and economic weight is difficult to overstate.
Tehran was quick to respond in kind. The navy of Iran’s Islamic Revolutionary Guard Corps said it had targeted three oil tankers it accused of transiting “unauthorized routes” through the Strait of Hormuz, along with three additional U.S. vessels operating elsewhere in the region.
The exchange marks a sharp departure from previous rounds of Gulf brinkmanship, in which commercial shipping was more often a bystander than a battlefield. Maritime intelligence firm Marisks did not mince words in its assessment, describing the Saturday strikes as a “major escalation” that has begun to blur long-standing lines of engagement.
Commercial tankers, the firm warned, are “now being deliberately used as instruments of reciprocal economic pressure, substantially weakening the previous distinction between military confrontation and commercial shipping,” a formulation that will do little to reassure shipowners, insurers, or the traders who price crude on the assumption that tankers remain, at least nominally, off-limits.
The practical consequences are already visible in the data. Analytics firm Kpler reported on Monday that an average of just 10 commodity vessels transited the Strait of Hormuz per day over the past ten days, the lowest volume recorded since May, and a stark illustration of how quickly risk perception can translate into real-world caution among shipowners and charterers alike.
That thinning of traffic is precisely what has traders on edge. “If tanker traffic begins to slow materially, the market could price in a much larger supply shock.
And there are already signs that this is happening,” said Priyanka Sachdeva, head of market insights at Phillip Nova, capturing the anxiety now running through trading desks from Singapore to London.
The Strait of Hormuz remains the conduit for roughly a fifth of global oil consumption, and even a partial slowdown in transit is enough to reshape the market’s calculus on risk.
Adding to that unease, Goldman Sachs has floated the possibility of a far steeper climb in prices, warning that crude could rally to as much as $120 a barrel should attacks on shipping continue to intensify, a scenario that would mark one of the sharpest energy-price shocks since the early days of Russia’s invasion of Ukraine.
Tensions show little sign of cooling. Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, said a restricted zone would be announced outside the Strait of Hormuz “in the coming days,” according to state media, a move that, if implemented, could further complicate navigation for commercial and military vessels alike and raise the stakes for any subsequent miscalculation.
Against this backdrop of mounting risk, OPEC+ opted for caution of its own. The producer group kept its output policy unchanged for October at a meeting on Sunday, saying in a statement that it first needs to reach agreement on new quotas before charting its next move.
The decision leaves the group on the sidelines for now, even as the supply risk emanating from the Gulf grows more acute by the day, a dynamic that traders will be watching closely as the week unfolds, with any further strikes on tankers likely to reset the market’s price floor once again.
WHAT YOU SHOULD KNOW
Tanker traffic through the Strait of Hormuz has dropped to its lowest level since May, just 10 vessels a day, as the U.S. and Iran trade direct strikes on commercial oil tankers rather than confining the conflict to military targets.
That shift is what’s driving the price action, and it’s why Goldman Sachs is now floating $120 oil if attacks continue. Everything else Brent at $96, WTI at $91, and OPEC+ standing pat is downstream of that one fact: the market is no longer just pricing in political risk; it’s pricing in an actual, measurable slowdown of oil leaving the Gulf.
