Oil prices pulled back on Monday as traders took profits following two consecutive weekly gains, but the retreat did little to unwind the geopolitical risk premium tied to the US-Iran standoff and heavily restricted shipping through the Strait of Hormuz.
Brent crude futures fell about 1.3% to $93.16 a barrel in Asian trading, while West Texas Intermediate lost 1.6% to $85.70. Both benchmarks had risen more than 5% last week, with Brent ending Friday at $94.39 and WTI at $87.06.
Sanctions risk remains the central driver. Danske Bank said the oil market remains tense and that sanctions uncertainty is keeping prices supported and traders on edge. Commerzbank Research analyst Barbara Lambrecht said expected US measures are likely to target countries still buying Iranian crude, with China a central focus. Iranian crude offers to Chinese refiners have already dropped sharply: shipments were about 534,000 barrels per day in August, versus an average of 1.4 million barrels per day in 2025, and some cargoes that previously traded at discounts are now being offered at premiums.
The Strait of Hormuz represents an even bigger supply risk. Kpler data showed only four commodity vessels crossed the strait on Sunday and 13 on Saturday, while UK maritime authorities estimate AIS-detected traffic is about 90% below pre-conflict levels. Before the conflict, Hormuz handled close to one-fifth of global oil flows. Iran has warned that further US economic pressure could trigger an attempt to halt oil exports across the Persian Gulf. ING strategists Ewa Manthey and Warren Patterson said Brent remains supported by the lack of progress between Washington and Tehran and persistent security problems around the strait. The EIA has lifted its 2026 Brent forecast to $87 a barrel, citing prolonged Hormuz constraints, and estimates crude and petroleum-liquid flows through the strait averaged just 4.9 million barrels per day in the second quarter, down from 21.6 million in late 2025.
Pressure is increasingly visible in refined fuel markets. Asian imports of light and middle distillates have fallen roughly 21% from pre-conflict averages, while Singapore gasoil margins have surged as diesel and jet-fuel availability tightens. For crypto markets, the relevant channel is macro: a prolonged energy supply shock could reinforce inflation concerns and risk-off positioning even if the immediate catalyst remains outside digital assets.
