Crude oil and gasoline prices surged on Monday, with June WTI crude closing up 2.78% and June RBOB gasoline rising 2.07%. This rally follows escalating tensions between the U.S. and Iran, as President Trump rejected Iran’s latest peace proposal, which prolongs the closure of the critical Strait of Hormuz. The ongoing conflict is significantly impacting global oil supplies, with Goldman Sachs estimating a reduction of around 14.5 million barrels per day (bpd) from Persian Gulf producers, contributing to a potential drawdown of global crude stockpiles nearing one billion barrels by June.

The implications for the energy sector are profound, as the International Energy Agency reported that over 80 energy facilities have been damaged during the conflict, with recovery potentially taking up to two years. Additionally, OPEC+ faces challenges in restoring production levels amid these geopolitical tensions, which could further tighten supply and support higher prices.

Market professionals should closely monitor developments in the Middle East, as ongoing disruptions could sustain upward pressure on oil prices, complicating supply chains and influencing broader market dynamics.

Source: nasdaq.com