Hormuz Conundrum Keeps Oil Price Above $90
Oil prices have pulled back after two consecutive weeks of gains, but the market remains supply-tight due to the US-Iran standoff and severely restricted shipping through the Strait of Hormuz.
The Brent crude price dropped by 1.3% to $93.16 a barrel in Asian trading, while WTI fell 1.6% to $85.70 on Monday, but these declines appear more like position adjustments than a reversal in the oil story.
Despite profit-taking, Brent remains supported above $90 due to refined-fuel tightness, particularly in diesel and jet fuel supply, which is harder to fix than crude rerouting.
Kpler data showed only four commodity vessels crossed the Strait of Hormuz on Sunday, with UK maritime authorities estimating AIS-detected traffic is about 90% below pre-conflict levels.
The physical shipping constraint is the core driver of oil prices, and a sudden, credible reopening of Strait of Hormuz shipping or a deal that removes the supply premium could collapse the tightness narrative.