Crude Prices Drop as Iran Faces Zero Oil Revenue

Crude oil prices extended their decline on Monday, as market fears about supply disruptions from the U.S.-Iran conflict eased, though industry leaders warned of prolonged volatility. Brent crude settled 1.8 percent lower at $100.32 per barrel, while West Texas Intermediate dropped 1.8 percent to $89.43 per barrel. Despite attacks by Iran-backed Houthis in Saudi Arabia and retaliatory strikes by Saudi forces, traders appeared less unsettled by the ongoing hostilities than before.

Shipping traffic through the Strait of Hormuz has returned to pre-war levels, and Saudi Arabia has managed crude shipments effectively, but industry executives warned of persistent challenges. Petronas CEO Tengku Muhammad Taufik predicted "bedlam" in oil markets through the end of the year and into 2027, citing shipping bottlenecks, reduced refinery output, and inventory shortages. Saudi Aramco CEO Amin Nasser echoed these concerns, noting that replenishing inventories and meeting demand could take up to two years.

Kuwait Petroleum Corporation CEO Shaikh Nawaf Al-Sabah highlighted the global refining capacity shortage, emphasizing that the world lacks the ability to compensate for lost production in the Middle East. Meanwhile, Iran’s oil minister, Mohsen Paknejad, resigned, as U.S. officials reported that Iran’s oil shipments have halted, leaving the country with zero oil revenue beginning this week.