Oil rises as uncertainty over Hormuz persists

Highlights

Brent gained 2.86%, while WTI rose 3.04%.
U.S.-Iran negotiations remain far apart on key issues.
Middle East crude exports are recovering despite risks.

Brent futures rose 2.86% to $107.30 a barrel, while U.S. West Texas Intermediate gained 3.04% to $95.22. The increase followed Trump's rejection of the Iranian proposal over the weekend, Reuters reported.

Diplomacy stalls as Hormuz remains in focus

Iran presented its proposal during the U.N. General Assembly in New York and transmitted it to Washington through Qatari mediators. The plan sought to reopen the Strait of Hormuz and restart negotiations within seven days if several Iranian conditions were met. Trump rejected the proposal Saturday, although he said Sunday that he expected U.S. negotiators to hold further talks with Iran this week.

The diplomatic impasse has kept a geopolitical premium in crude prices because normal traffic through Hormuz has yet to be restored. The waterway ordinarily carries roughly one-fifth to one-quarter of global oil flows, making disruption there particularly important for international energy markets.

Middle East exports rebound

Physical supply conditions have, nevertheless, improved. Preliminary Kpler data showed crude exports from major Middle East producers recovering to 12.8 million barrels per day in September, the highest level since the conflict began in February.

Shipments through Hormuz were on course to reach about 7.4 million barrels per day this month. Saudi Arabia and the United Arab Emirates increased exports, while Saudi Arabia redirected some shipments from the Red Sea port of Yanbu to Ras Tanura after attacks damaged the East-West pipeline.

On Monday, spot oil prices rose, with Brent gaining 1.35% while WTI jumped more than 2% amid uncertainty over a potential U.S. restriction on diesel exports.

European low-sulfur gasoil also traded at a record premium of roughly $95 a barrel over Brent last week. Goldman Sachs estimated that every week of a U.S. diesel export ban could lift European wholesale diesel prices by about $3 a barrel, or just under 2%.

Supply recovery meets geopolitical risk

The rebound in Middle East exports offers some relief, but the oil market remains sensitive to developments around Hormuz. Renewed attacks elsewhere in the region, including intercepted Houthi missiles and drones aimed at Saudi Arabia, continue to underline the vulnerability of energy infrastructure and shipping routes.

For crude markets, that leaves two competing forces. Recovering exports are putting more barrels back into global supply, while stalled diplomacy keeps the risk of renewed disruption elevated. With Brent above $107 and WTI above $95, traders are still assigning substantial weight to geopolitical developments.

We also reported Iran pushes negotiations as the Hormuz standoff continues.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.