Oil prices fall to $108 after hitting 5-month high
What's the story
Oil prices fell slightly on Monday, after hitting a five-month high. Brent crude was trading at around $108 a barrel in early Asian trade, having surged nearly 4% on Friday. The fall comes as traders evaluate new tensions in West Asia against indications that the region's supply is stabilizing near pre-war levels.
Regional unrest
Regional tensions continue to affect oil market
The ongoing unrest in West Asia continues to rattle the oil market. A Saudi helicopter crashed near the Yemen border and Houthi rebels attacked Yanbu, a key export terminal.
UK Maritime Trade Operations (UKMTO) reported that two tankers were struck in the Arabian Gulf. These incidents have added to the uncertainty surrounding oil supply from the region.
Military intervention
US escorts over 100 million barrels of oil through Hormuz
Over the weekend, the US revealed its forces had escorted over 100 million barrels of oil through the Strait of Hormuz last week.
This development seemed to reassure traders that the ongoing conflict hadn't disrupted exports as much as initially feared.
Brent crude has surged over 75% this year, driven by escalating conflicts in West Asia and the Russia-Ukraine war.
Physical markets continue to indicate scarcity, with refined products like diesel witnessing even sharper price increases than crude oil.
Diplomatic tensions
US diesel deal with Russia faces backlash
The US's diesel export deal with Russia, which included lifting tariffs and sanctions on the country's energy exports, has drawn criticism from lawmakers.
US President Donald Trump said the move was intended to keep the Kremlin's peace talks with Ukraine alive.
However, it has sparked a backlash in Washington, leading to the introduction of a bill aimed at blocking these fuel purchases amid ongoing tit-for-tat attacks on energy infrastructure between Moscow and Kyiv.