Crude oil prices surged on Monday, with June WTI closing up 4.39% and RBOB gasoline up 3.98%, driven by escalating tensions in the Strait of Hormuz. The United Arab Emirates reported an Iranian drone attack that ignited a fire at the Fujairah oil zone, alongside missile threats and attacks on vessels, raising concerns about supply disruptions in this critical shipping lane. The U.S. military’s involvement in protecting maritime traffic further underscores the geopolitical risks impacting energy markets.

The heightened conflict has significant implications for global oil supply, with Goldman Sachs estimating a reduction of 14.5 million barrels per day (bpd) from Persian Gulf output due to the ongoing blockade. This disruption has already drawn down nearly 500 million barrels from global stockpiles, with potential further declines expected. Additionally, OPEC+ plans to increase production may be hindered by the conflict, as regional producers face operational challenges.

Market participants should closely monitor developments in the Strait of Hormuz, as continued instability could exacerbate global oil shortages and keep prices elevated, impacting trading strategies and portfolio allocations in energy sectors.

Source: nasdaq.com