Oil prices experienced a notable decline of approximately 3% on Monday, following the passage of several vessels through the strategically vital Strait of Hormuz. This development came even as President Donald Trump urged allied nations to assist in securing the waterway, a plea that was largely met with reluctance. Simultaneously, the head of the International Energy Agency (IEA) hinted at the possibility of releasing additional oil reserves to help counteract the upward pressure on prices caused by the ongoing conflict involving Iran.
Brent crude futures dropped by $2.93, or 2.8%, settling at $100.21 per barrel, while the U.S. West Texas Intermediate (WTI) crude saw a sharper decline of $5.21, or 5.3%, closing at $93.50 per barrel. Market analysts attributed the steeper fall in U.S. prices to several factors, including near-record domestic crude production, enhanced by imports from Venezuela, and the anticipated release of oil from the U.S. Strategic Petroleum Reserve. Additionally, some traders were offloading the April WTI front-month contract ahead of its expiration on March 20 at the New York Mercantile Exchange, contributing to the price drop.
It is important to recall that on the previous Friday, Brent crude had closed at its highest level since August 2022, while WTI reached its peak since July 2022. Both benchmarks had surged nearly 40% following the U.S. and Israel’s military actions against Iran on February 28. Despite these tensions, President Trump reiterated his call for international cooperation to ensure the Strait of Hormuz remains open and secure for maritime traffic. However, his appeals were met with limited enthusiasm, as European Union foreign ministers expressed no interest in expanding the EU’s naval mission in the Middle East to cover the strait, EU foreign policy chief Kaja Kallas.
The Strait of Hormuz holds immense strategic importance, serving as a critical maritime corridor through which about one-fifth of the world’s oil and liquefied natural gas (LNG) supplies are transported. Iran, which has permitted some Indian vessels to transit the strait, has requested India to release three tankers that were seized in February. These discussions are part of ongoing negotiations aimed at securing safe passage for vessels flying the Indian flag or destined for Indian ports. This development was confirmed by multiple sources familiar with the matter.
Energy advisory firm Ritterbusch and Associates noted that the oil market was reacting to reports of tankers successfully navigating the Strait of Hormuz, alongside President Trump’s renewed calls for assistance in escorting vessels through the area. Earlier on Monday, U.S. Treasury Secretary Scott Bessent indicated that the United States was currently comfortable with some Iranian, Indian, and Chinese ships passing through the strait. He also emphasized that any further measures to control rising energy prices would depend heavily on the duration of the conflict.
Globally, governments are grappling with the challenge of shielding their populations from soaring energy costs, which have been exacerbated by disruptions in oil and gas supplies linked to the ongoing war. The IEA member countries recently agreed to the largest-ever coordinated release of 400 million barrels from strategic reserves, and Executive Director Fatih Birol suggested that further releases could be considered if necessary to stabilize the market.
Meanwhile, Israel has announced detailed plans to continue military operations for at least three more weeks, as its forces targeted various sites across Iran overnight. U.S. Energy Secretary Chris Wright expressed optimism on Sunday, predicting that the conflict might conclude within the next few weeks, which would allow oil supplies to recover and energy prices to ease. However, tensions remain high, with President Trump warning of additional strikes on Iran’s Kharg Island, a crucial hub that handles roughly 90% of the country’s oil exports. These warnings followed recent U.S. attacks on military targets that provoked retaliatory actions from Tehran.
In the United Arab Emirates, Abu Dhabi’s state oil company ADNOC temporarily halted crude loading operations after a drone attack sparked fires at a key export terminal. Despite this disruption, some loading activities resumed at Fujairah, with two out of three single-point moorings—where tankers connect to receive oil—reported operational. These developments underscore the fragile state of energy infrastructure in the region amid escalating geopolitical tensions.
