Oil prices moved sharply higher on Monday as uncertainty around the Strait of Hormuz returned to the spotlight, putting supply risk back at the centre of the market.
Brent crude futures climbed $3.98, or 3.82%, to $108.30 a barrel by 09:59 GMT. WTI gained $3.52, or 3.81%, to $95.93. The latest jump came after an earlier rise of more than 2%, showing how quickly crude prices can react when traders see fresh risks to global oil supplies.
For traders in the Philippines, higher global oil prices can be an important market signal because changes in energy costs can feed into inflation, currencies, interest-rate expectations and broader risk sentiment.
U.S.-Iran Talks Keep Oil Traders Watching Headlines
The latest move was driven by a lack of progress between Washington and Tehran.
Iran has maintained conditions for reopening the Strait, including reduced U.S. military pressure, the lifting of restrictions on Iranian oil sales and a ceasefire. U.S. President Donald Trump rejected Iran’s proposal but has indicated that further negotiations could take place this week.
This leaves the oil market with two possible paths.
If negotiations make progress, more crude could move through the region, potentially putting downward pressure on prices. If talks break down again, supply uncertainty could remain and keep the geopolitical premium in oil elevated.
For traders, that means fresh headlines could move Brent and WTI quickly.
Hormuz Flows Are Recovering, But Supply Is Still Tight
The latest data show that some oil flows are improving.
Reuters reported that crude exports from key Middle Eastern producers increased to 12.8 million barrels per day in September, the highest level since the conflict began. Shipments through the Strait of Hormuz were expected to reach about 7.4 million barrels per day this month.
However, regional exports remained around 6 million barrels per day below February’s 18.8 million barrels per day, according to Kpler data cited by Reuters.
So, the situation is improving, but the wider supply deficit has not gone away.
The Strait of Hormuz previously carried around one-fifth of global crude oil and liquefied natural gas supplies. Any major disruption to shipping can therefore affect crude and refined-product prices around the world.
Diesel Prices Are Also Under Pressure
Traders are keeping an eye on diesel markets as well.
European and U.S. diesel prices have reached record levels as disruptions affecting Middle Eastern and Russian crude and refined-product exports tighten fuel supplies.
Reuters reported that Goldman Sachs estimated a U.S. diesel export ban could raise European wholesale diesel prices by around $3 a barrel for every week it remained in place.
For the wider economy, that can be a concern because higher fuel prices can feed into inflation expectations.
Higher Oil Is Affecting Other Markets
The oil rally is also spilling into global financial markets.
Reuters reported that global stocks fell on Monday as crude prices climbed, while the U.S. dollar moved toward a two-month high. The U.S. 30-year Treasury yield rose to 5.517%, close to its highest level since 2004.
Gold moved lower, with spot gold falling around 3% to $4,156.45 an ounce by 08:14 GMT, reaching its lowest level in more than seven weeks.
For traders, the current market relationship can be summed up simply:
Higher oil → higher inflation risk → higher-rate expectations → stronger dollar and yields → pressure on gold and risk assets.
That relationship is particularly useful to watch when trading forex, commodities and global indices.
What Could Move Oil Next?
The next major driver is likely to be developments in U.S.-Iran negotiations and actual shipping flows through the Strait of Hormuz.
A credible agreement that allows the Strait to operate more normally could remove some of the geopolitical premium from crude.
But if negotiations break down, attacks resume or physical oil flows decline, supply concerns could stay elevated and keep prices under pressure.
For now, traders are weighing improving regional exports against the possibility that the broader supply deficit continues.
Key Market Impact
| Market | Current Impact | Main Driver |
|---|---|---|
| Brent crude | Higher, above $108 | Hormuz uncertainty and supply risk |
| WTI crude | Higher, near $96 | Geopolitical risk and tighter supply expectations |
| U.S. dollar | Firmer | Safe-haven demand and higher-rate expectations |
| Gold | Lower | Higher oil-driven inflation and rate expectations |
| Global stocks | Under pressure | Higher energy costs and bond yields |
| Treasury yields | Higher | Inflation concerns and monetary-policy expectations |
The market moves above are based on the latest available Reuters reporting on September 28.
Trader Insight
The main question for oil traders is not simply whether the Strait of Hormuz is technically open.
The bigger issue is whether enough oil can actually move through the Strait to ease the wider supply deficit.
Regional exports have recovered, but they remain below pre-conflict levels. If flows continue to improve, crude could lose some of its geopolitical premium. If negotiations fail and physical flows weaken again, supply risk could remain a major driver.
For Philippine traders, it is worth keeping an eye on Brent and WTI alongside the U.S. dollar, Treasury yields, gold, diesel prices and Hormuz shipping flows.
Looking at these markets together can give traders a better view of whether the oil move is mainly being driven by physical supply concerns, inflation expectations or changing risk sentiment.
What to Watch Next
- U.S.-Iran negotiations: Any major update could quickly change crude’s risk premium.
- Hormuz shipping volumes: Continued improvement could ease supply concerns.
- Brent and WTI: Watch whether the current rally holds or reverses.
- Diesel prices: Further gains could add to inflation pressure.
- U.S. Treasury yields and Fed expectations: Higher oil prices could reinforce expectations for rates to remain elevated for longer.
- Gold and the U.S. dollar: Their reaction could show whether inflation and rate concerns are dominating broader market sentiment.