West Texas Intermediate (WTI) crude oil prices rose on Monday, trading at $99.40 per barrel, up approximately $3 from the daily opening price of $96.46, though still below Friday's close of $99.57 [1]. The price increase follows US President Donald Trump's announcement that the US military will assist in freeing vessels stranded in the Strait of Hormuz as a 'humanitarian gesture' toward neutral countries [1]. However, Trump did not provide further operational details, and investors have reacted with skepticism to the announcement [1][2]. ING analysts Warren Patterson and Ewa Manthey noted that Trump's plan, referred to as 'Project Freedom,' initially triggered a brief sell-off in oil prices, but the market subsequently recovered those losses, indicating that traders remain unconvinced by the plan's effectiveness [2].
Iranian authorities reiterated their stance that the Strait of Hormuz will remain closed and warned that any action in the area would be considered a violation of the ceasefire, vowing to protect the waterway with 'full strength' [1]. This ongoing tension has fueled fears of further escalation and contributed to the upward pressure on oil prices [1][2].
Over the weekend, OPEC+ announced a supply increase of 188,000 barrels per day for June [1][2]. However, both sources highlight that this increase is unlikely to materialize, as 55% of the additional supply is expected to come from Persian Gulf producers who are unable to export due to the Hormuz disruptions [1][2]. As a result, the OPEC+ decision has had no significant impact on oil prices [1][2].
Speculative activity in the oil market has also intensified, with the latest data showing that speculators increased their net long positions in ICE Brent by 13,862 lots to a total of 383,205 lots as of last Tuesday, driven primarily by new long positions entering the market [2].
CONCLUSION
Oil prices remain elevated near $100 per barrel as geopolitical risks in the Strait of Hormuz persist, overshadowing both US intervention efforts and OPEC+'s planned supply increase. Market participants remain skeptical about the effectiveness of proposed solutions, and speculative interest in oil continues to rise. The situation remains highly sensitive to further developments in the region.