Oil prices experienced a significant increase on Monday, with Brent crude futures rising by 1.98% to $111.42 per barrel and U.S. West Texas Intermediate futures climbing 2.43% to $107.98 per barrel, marking the highest prices seen this month. This surge is largely attributed to U.S.
President Donald Trump's recent warning to Iran, stating that they need to act quickly to resolve ongoing tensions, particularly regarding the peace talks and the reopening of the Strait of Hormuz. Trump's comments suggest that the deadlock could lead to renewed armed conflict, which raises concerns about the stability of oil supplies from this critical region.
The Strait of Hormuz is vital for global oil transport, accounting for nearly 20% of the world's oil and gas supply prior to the current conflict.
Additionally, the International Energy Agency (IEA) has reported that global oil inventories are depleting at an unprecedented rate, with projections indicating that inventories could drop to near all-time lows of 7.6 billion barrels by the end of May if current demand levels persist.
This depletion of inventories, coupled with the ongoing geopolitical tensions, could lead to further spikes in oil prices in the near future