Oil prices decline as Strait of Hormuz flows improve and supply fears ease

  • Oil prices halted a three-day decline amid Middle East supply and diplomatic developments.
  • Brent traded around $104 per barrel while WTI remained below $100.
  • General Brad Cooper reported six-month-high crude and LNG transit through the Strait of Hormuz.

Oil prices halted a three-day decline as fears of Middle East supply disruptions competed with signs of improving shipments through the Strait of Hormuz and prospects for U.S.-Iran diplomacy. Brent crude traded around $104 a barrel on Monday, while West Texas Intermediate remained below $100. General Brad Cooper, commander of U.S. Central Command, said crude oil and liquefied natural gas transit through the Strait of Hormuz had reached a six-month high. The improvement has eased some immediate supply concerns, though traders remain focused on repairs to Saudi Arabia's damaged East-West pipeline after Saudi Aramco told European refiners it would not supply next month's long-term contract volumes. Saudi Arabia issued air-raid alerts for Riyadh and Yanbu over the weekend, its first alert for the capital since March-April. U.S. President Donald Trump said a meeting with Iranian President Masoud Pezeshkian during this week's UN General Assembly was "probably open," while Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani said messages were being exchanged between Washington and Tehran. Supply risks also include damage to a Moscow refinery during a major Ukrainian drone assault, tightening diesel availability. The conflicts have added to inflation pressures after the Federal Reserve raised its benchmark interest rate last week, with Minneapolis Fed President Neel Kashkari saying price pressures were spreading beyond the oil shock.

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