Reuters reported that shipping data showed a sharp decline in the number of vessels passing through the Strait of Hormuz on Sunday after Iran announced it had once again closed the waterway, accusing Israel and the United States of violating the interim peace agreement.
Crude oil price on June 22
Brent crude futures rose 54 cents, or 0.67%, to $81.11 a barrel, after briefly touching $82.30 at the start of trading. U.S. West Texas Intermediate (WTI) crude futures gained $2.02, or 2.64%, to $78.62 a barrel ahead of the contract’s expiry later on Monday. The more actively traded August contract advanced $1.43 to $77.28 a barrel. U.S. markets were closed on Friday due to a holiday, resulting in no settlement.Adding to market uncertainty, U.S. President Donald Trump threatened to resume attacks on Iran, even as U.S. Vice President JD Vance met Iranian officials on Sunday for the first discussions under the interim deal. Tehran, meanwhile, said Washington had failed to honour its commitment to halt fighting in Lebanon.
Also read: Global Market Today: Asian stocks slip, oil up on peace doubts
In Lebanon, Israeli strikes killed at least 20 people on Saturday, according to the state news agency NNA. The attacks came a day after a ceasefire with Hezbollah took effect in an effort to stop months of escalating violence.
Despite Monday’s gains, oil prices had fallen more than 8% last week amid expectations that cargoes stranded inside the Gulf would be released and that U.S. sanctions on Iranian oil could eventually be lifted under a U.S.-Iran agreement.
Where are prices headed?
Despite the recent slide in oil prices, a complete reopening of Hormuz is expected to be a complex process. It will require careful coordination of vessel movements, the restart of oil wells, repairs to infrastructure and agreement on de-mining operations. Some shipowners also remain wary of operating conditions in the strait and the wider Persian Gulf.Analysts note that global oil inventories were depleted during the extended disruption of shipping through the Strait of Hormuz and will take time to rebuild. Stockpiles could continue falling before fresh Gulf supplies begin reaching international markets.Last month, Saudi Aramco Chief Executive Officer Amin Nasser cautioned that disruptions in the Strait of Hormuz could delay a return to stability in global oil markets until 2027. According to Nasser, prolonged interruptions could affect nearly 100 million barrels of oil supply each week. Saudi Aramco remains the world’s largest oil producer.
Morgan Stanley described the oil market as being in “a race against time,” warning that some of the factors that have limited the rise in prices could weaken if the Strait of Hormuz remains closed through June.
The brokerage noted that higher U.S. crude exports and softer Chinese demand have so far helped absorb part of the supply shock. However, it cautioned that global supplies could tighten again if disruptions in the strategic shipping route continue, particularly beyond the period during which the U.S. and China are able to cushion the impact.
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