Crude oil prices fell more than USD 1 a barrel on Monday as investors booked profits following last week’s gains, while markets remained focused on the possibility of fresh US sanctions against Iran and their impact on oil supplies from the Middle East.
Brent crude futures fell USD 1.22, or 1.29 per cent, to USD 93.17 a barrel by 0035 GMT. US West Texas Intermediate (WTI) crude was at USD 85.86 a barrel, down USD 1.20, or 1.38 per cent.
Both benchmarks had gained more than 5 per cent last week, marking their second consecutive weekly rise, as talks between the United States and Iran remained deadlocked. The prolonged tensions have raised concerns over shipments through the Strait of Hormuz, a key global oil route through which around one-fifth of the world’s oil supply has historically transited.
Crude oil prices fall after recent rally
The decline in crude prices on Monday came after oil benchmarks posted strong gains last week.
Investors are now assessing whether the latest developments could ease or further intensify supply concerns. The possibility of additional US sanctions on Iran has added uncertainty to the outlook for crude supplies.
Zee Business Managing Editor Anil Singhvi said the Iranian president’s statement that the war with the United States should end was the most important development over the weekend.
According to Singhvi, the statement could provide some relief to global markets and crude oil prices.
He said the Iranian president’s reason for wanting the war to end was that Iran had already won the conflict.
Iranian president’s statement offers some relief
Singhvi said the statement was significant because the Iranian president does not frequently make such comments.
“When a person gives fewer statements, their statements have more value,” Singhvi said. He added that markets reacted positively to the comments, with crude oil prices falling by around USD 2-3 from recent levels.
Crude had recently moved close to USD 95 a barrel, raising concerns for global markets, particularly because a prolonged disruption in the Middle East could keep oil prices elevated.
“At least one good thing is that crude has come down a little,” Singhvi said. The movement in crude prices is expected to remain an important factor for Indian markets, given the country’s dependence on imported oil.
Strait of Hormuz remains key focus
Tensions around the Strait of Hormuz continue to keep the oil market on edge. US Central Command said US forces have redirected 70 commercial vessels, disabled three and boarded two since enforcing a naval blockade against Iran.
The US military also shared updates about naval operations in the region, including activities involving the USS Boxer and other vessels in West Asian waters.
Meanwhile, Iran’s Ports and Maritime Organisation has warned vessels violating its protocols for the Strait of Hormuz that they could face restrictions on future passages, including fines, detention or confiscation.
The authority also said vessels cooperating with ships already listed as non-compliant could themselves be added to the list.
Iran announces fees for vessels using Strait
Iran has also said that vessels from authorised countries transiting the Strait of Hormuz will be required to pay service fees to Tehran.
Iranian National Security Commission spokesperson Ebrahim Rezaei said the charges would cover services including navigation, environmental protection, fuelling under certain conditions, insurance and safety.
The fees could be paid in Iranian rials or another currency, according to Iran’s state broadcaster IRIB.
The development adds another layer of uncertainty for shipping companies and cargo owners using the strategically important waterway.
The Iranian authority has also urged cargo owners shipping to or from the Persian Gulf to check its list of non-compliant vessels before chartering ships.
US-Iran developments to guide crude, markets
US President Donald Trump has continued to make statements regarding the Strait of Hormuz. On August 23, he shared an image depicting the waterway as “NEW US Territory”, following a similar post on August 18.
Trump has also said Iran wants an agreement but is not ready for one, while Iranian officials have criticised the US campaign against the country.
Singhvi said the latest developments between Washington and Tehran would remain important for global markets.
He also noted that Gift Nifty’s rise was partly linked to the positive statement from the Iranian president.
With crude oil prices now easing from recent highs, investors will closely watch further developments on US sanctions, the Strait of Hormuz and the possibility of renewed US-Iran talks.
The US has also started implementing sanctions against Iran, with US Treasury Secretary Scott Bessent commenting on the measures.
