Oil prices stabilized after strong gains last week as uncertainty surrounding relations between the United States and Iran and escalating tensions in the Strait of Hormuz continued to provide broad support to crude prices.
Brent crude futures rose 0.1% to $88.62 a barrel, while West Texas Intermediate crude futures slipped 0.1% to $81.37 a barrel.
Brent gained more than 5% last week as tensions between the United States and Iran persisted, while Tehran intensified attacks on energy infrastructure across West Asia.
Shipping activity through the Strait of Hormuz slowed further following Iranian attacks on oil tankers in the region, while the United States continued to maintain its naval blockade on Iran.
Over the weekend, Iranian Foreign Minister Abbas Araghchi reiterated Tehran’s rejection of direct negotiations with the United States, while Washington threatened to impose additional economic measures against Iran.
The conflict in West Asia also expanded to another front in the Red Sea, where Iran backed Houthis continued to attack vessels in the Bab el Mandeb Strait. The attacks threaten to create further disruption to oil supplies across West Asia.
Concerns over tightening supply overshadowed expectations of weaker global oil demand issued by major energy institutions last week. Both the Organization of the Petroleum Exporting Countries and the International Energy Agency lowered their forecasts for oil demand growth in 2026.
ANZ analysts said refined petroleum products had come under greater pressure than the broader crude market as a result of the conflict in West Asia.
The analysts noted that diesel in particular had become the tightest segment of the refined products market, with supplies affected by a combination of production disruptions, refinery outages and restrictions on shipping operations.
ANZ analysts said refinery disruptions in the Arabian Gulf had significantly affected diesel production and exports at a time when global demand for the fuel remained strong. They added that conditions had been further complicated by ongoing clashes between Russia and Ukraine after Kyiv launched attacks targeting Russian oil infrastructure.
This trend points to the possibility of tighter crude oil and refined product supplies over the coming months.
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