On Monday, oil futures saw a notable correction following a period of strong gains. May Brent crude declined by $2.93, or 2.8%, to settle at $100.21/bbl, while April WTI (NYMEX) crude dropped by $5.21, or 5.3%, to close at $93.50/bbl. The decline came amid reports that some vessels had managed to transit the Strait of Hormuz, temporarily easing fears of a complete supply blockade. Additionally, expectations of potential strategic reserve releases added downward pressure on prices.
WTI crude experienced a steeper fall compared to Brent, largely due to domestic factors. Near-record US crude production, partly supported by imports from Venezuela, weighed on prices. The possibility of further releases from the US Strategic Petroleum Reserve and position unwinding ahead of the April contract expiry on March 20 also intensified selling pressure.
Despite the pullback, oil prices rebounded strongly in the following session as supply risks quickly returned to focus. Both benchmarks rose by around 3%, with Brent climbing back above $103/bbl and WTI surpassing $96/bbl. The recovery was driven by persistent concerns over disruptions in the Strait of Hormuz, a critical route that typically handles around one-fifth of global oil shipments.
Market participants remain highly sensitive to developments in the region, as tanker movements through the strait have declined significantly amid ongoing attacks and security concerns. Shipping activity has dropped sharply, reflecting uncertainty over safe passage and the effectiveness of efforts to protect maritime traffic.
With geopolitical risks still elevated and no immediate resolution in sight, analysts warn that oil markets are likely to remain volatile. The balance between temporary easing signals and underlying supply threats continues to drive rapid price swings, keeping traders on edge.
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