West Texas Intermediate (WTI) US Crude Oil maintained levels above $100 per barrel on Monday, with intraday trading ranging from session highs near $101 to a brief dip below $98, before recovering to climb approximately 1.15% at the midpoint of the American market session [1]. Brent Crude also saw gains, trading above $115 [1]. The crude oil market has become highly sensitive to headlines, particularly five weeks into the US-Iran conflict, with price swings triggered by statements from both US and Iranian officials [1].
Monday's volatility was driven by President Trump's social media activity. In an early-morning post, Trump stated the US is in 'serious discussions' with a 'new and more reasonable regime' in Tehran, suggesting progress toward ending hostilities. This initially led to a brief price dip as traders anticipated de-escalation [1]. However, Trump later threatened to 'completely obliterate' Iran's electric generating plants, oil wells, and Kharg Island if the Strait of Hormuz is not reopened, causing prices to rebound [1]. Iranian Foreign Minister Abbas Araghchi denied any negotiations with the US, stating that no talks have occurred or are planned, highlighting a recurring contradiction between Washington and Tehran that continues to fuel oil market volatility [1].
The conflict widened over the weekend as Yemen's Iran-aligned Houthi movement launched missiles at Israel, marking their first direct involvement in the broader US-Iran war [1]. This escalation raises concerns about potential disruptions through the Bab el-Mandeb Strait, a key shipping route connecting the Gulf of Aden to the Red Sea. Societe Generale's global head of commodities research noted that further disruption in this waterway could drive oil prices even higher [1]. The ongoing closure of the Strait of Hormuz, which typically handles about 21% of global oil consumption, has left traders facing shrinking safe passage options for oil shipments [1]. Goldman Sachs estimates the current geopolitical risk premium embedded in crude prices is between $14 and $18 per barrel [1].
WTI's sustained position above $100, a level not seen since 2022, is described by analysts as a structurally supported floor, largely due to the effective closure of the Strait of Hormuz since early March, which has removed an estimated 17.8 million barrels per day from normal flows [1].
CONCLUSION
WTI crude oil's surge above $100 reflects heightened geopolitical tensions and supply disruptions stemming from the US-Iran conflict and broader regional escalation. Market volatility remains elevated, with analysts citing a significant risk premium and structurally supported price floor. Traders are closely watching developments, as further conflict or shipping disruptions could push prices even higher.