Crude oil futures climbed on Monday amid ongoing tensions between the United States and Iran, sustaining a geopolitical risk premium in energy markets.
US Maritime Advisory Issued
The U.S. Department of Transportation released an updated advisory urging American-flagged commercial vessels to maintain maximum distance from Iranian territorial waters in the Strait of Hormuz and Gulf of Oman. Officials highlighted risks of illegal boardings by Iranian forces, citing a recent incident on February 3.
Approximately one-fifth of global oil consumption transits through the Strait of Hormuz, making any disruptions a significant concern for supply chains.
Market Reaction and Broader Context
Brent crude futures rose 1.5% to settle at $69.04 per barrel, while West Texas Intermediate increased 1.3% to $64.36 per barrel. Traders noted that short-term price movements hinge more on Middle East risk premiums than on fundamentals.
Positive initial indirect talks between the U.S. and Iran occurred on Friday, with both sides committing to continue discussions. However, Iran’s foreign minister warned that the country would target U.S. bases in the Middle East if attacked.
U.S. military presence in the region remains elevated, contributing to persistent uncertainty in oil markets.
