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Summary

The US Central Command said that US forces will begin imposing control over all maritime traffic entering and leaving Iranian ports at 14:00 GMT on Monday.

The Organization of the Petroleum Exporting Countries (OPEC) in its monthly report on Monday cut its forecast for global oil demand in the second quarter of the year by about 500,000 barrels per day, attributing this to the impact of the ongoing war in the Middle East.

OPEC's report on its website predicted that average global oil demand will reach 105.07 million barrels per day in the second quarter, down from the forecast of 105.57 million barrels per day in last month's report.

It added, "The demand growth forecast for the second quarter of 2026 has been revised downward for both OECD and non-OECD countries, mainly due to a slight temporary weakness in oil demand growth, given the ongoing developments in the Middle East."

However, the organization expected this decline to be compensated in the second half of the year. The organization said that global demand growth for the entire year remains unchanged from its previous estimates.

Oil Prices Surge

Oil prices jumped to exceed $100 per barrel on Monday as the US Navy prepares to impose control over ship traffic in the Strait of Hormuz, a move that could limit Iranian oil exports, after Washington and Tehran failed to reach an agreement to end the war.

Brent crude futures rose by $6.71, or 7.05 percent, to $101.91 per barrel by 01:04 GMT, after closing down 0.75 percent on Friday.

US West Texas Intermediate crude reached $104.16 per barrel, up $7.59, or 7.86 percent, after falling 1.33 percent in the previous session.

Saul Kavonic, head of energy research at MST Marquee, said, "The market has now largely returned to the conditions that prevailed before the ceasefire, except that the US will now also block the remaining Iranian flows of up to 2 million barrels per day through the Strait of Hormuz."

Imposing Control over the Strait of Hormuz

President Donald Trump said on Sunday that the US Navy will begin imposing control over the Strait of Hormuz, escalating tensions after lengthy talks with Iran failed to reach an agreement to end the war, threatening the fragile two-week-old ceasefire. He added that oil and gasoline prices could remain high until the November midterm elections, a rare acknowledgment of the potential political repercussions of his decision to attack Iran six weeks ago.

The US Central Command said that US forces will begin imposing control over maritime traffic entering and leaving Iranian ports at 10 am Eastern Time (14:00 GMT) on Monday.

IG market analyst Tony Sycamore said this move would effectively choke off Iranian oil flows, forcing Tehran's allies and clients to exert the necessary pressure to reopen the waterway.

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Iran's Revolutionary Guard said on Sunday that any military vessels attempting to approach the Strait of Hormuz would be considered a violation of the US two-week ceasefire and would be dealt with firmly and decisively.

Three Fully Loaded Supertankers

Despite the impasse, shipping data showed that three supertankers fully loaded with oil crossed the Strait of Hormuz on Saturday. They are apparently the first ships to exit since the ceasefire agreement was reached last week.

Shipping data from the London Stock Exchange Group revealed that oil tankers are avoiding the Strait of Hormuz ahead of the planned US control of the strait.

On Sunday, Saudi Arabia announced that it has fully restored its oil production capacity via the East-West pipeline to about 7 million barrels per day, days after assessing damage to its energy sector from attacks during the conflict with Iran.

The Wall Street Journal reported, citing officials and people familiar with the matter, that President Donald Trump and his advisers are considering resuming limited military strikes on Iran, in addition to imposing US control over the Strait of Hormuz, as a way to break the deadlock in peace talks.

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More about: United States, Iran, Oil prices, Gasoline prices, Iranian ports, Donald Trump