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Oil prices extended their upward trajectory on Monday, supported by escalating geopolitical tensions and mounting concerns over supply disruptions.
The closure of the Strait of Hormuz continued to fuel global supply fears. At the same time, the possibility a secondary disruption in the Red Sea is adding to the concerns.
Supply-side risks are being further amplified by the potential for military escalation.
Additional U.S. troop deployments and ongoing attacks on key energy infrastructure are reinforcing concerns over sustained tensions and disruptions, underpinning the current bullish momentum in crude markets.
Looking ahead, oil prices are likely to remain highly sensitive to geopolitical developments. Any escalation affecting key maritime routes could drive further upside, particularly if multiple chokepoints are simultaneously compromised. Conversely, the reopening of the Strait of Hormuz could alleviate some of the upward pressure. However, given the scale of current disruptions, normalisation in supply flows in the event of a de-escalation may take time, suggesting that oil prices could still remain elevated.
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