Oil Prices Rise on Geopolitical Risk Premium, But Refined Products Still in Shortage

Oil prices rose on Monday following US President Donald Trump's rejection of an Iranian proposal to reopen the Strait of Hormuz, adding geopolitical risk premium.

Brent crude climbed 1.5% to $106 a barrel in Asian trading, while WTI gained roughly 1.1% to $93.40.

The more significant shortage is now in diesel and refining capacity, rather than oil itself, which could lead to higher inflation as freight, agriculture, and industrial fuel costs remain vulnerable to disruptions.

Preliminary Kpler data shows that Middle East exports are set to average 12.8 million barrels a day in September, the highest since the war began in February.

The International Energy Agency reported US diesel prices exceeding $200 a barrel equivalent in early September, and combined diesel exports from the Gulf and Russia were 1.6 million barrels a day below February levels.