Oil prices remained close to six-week highs on Monday as renewed attacks involving the United States and Iran kept traders focused on crude shipments through the Strait of Hormuz and other Middle Eastern waterways.
Brent crude futures slipped 9 cents, or 0.1%, to $96.19 a barrel at 0822 GMT. The contract had earlier reached $97.93, its highest level since July 24.
U.S. West Texas Intermediate crude declined 45 cents to $91.03 a barrel, remaining close to its recent six-week high.
The moves followed gains of around 8% for Brent and nearly 10% for WTI last week after attacks between the U.S. and Iran resumed.
Hormuz vessel traffic falls to lowest since May
U.S. Central Command said American forces struck three Iranian oil tankers on Saturday, including one off the coast of Kharg Island near Iran’s main oil export hub.
Iran’s Islamic Revolutionary Guard Corps navy said it targeted three oil tankers travelling through unauthorised routes in the Strait of Hormuz. It also said it targeted three additional U.S. vessels in other locations.
Marisks, a maritime intelligence firm, called Saturday’s attacks a “major escalation.”
“Commercial tankers are now being deliberately used as instruments of reciprocal economic pressure, substantially weakening the previous distinction between military confrontation and commercial shipping,” it added.
Data from analytics firm Kpler showed an average of 10 commodity vessels per day passed through the Strait of Hormuz during the past 10 days, the lowest level since May.
“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.
Goldman Sachs said crude prices could reach as much as $120 a barrel if attacks on shipping increase.
Iran signals restricted zone as OPEC+ holds policy steady
Iran intends to announce a restricted zone outside the Strait of Hormuz in the coming days, according to Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, as cited by state media.
The planned zone comes as markets continue to assess the implications of reduced vessel traffic and military activity for Middle Eastern crude flows.
OPEC+ separately maintained its existing oil output policy for October at a meeting on Sunday.
The producer group said it needs to reach an agreement on new quotas before deciding on subsequent changes to production policy.
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