Oil prices declined sharply Monday, dropping over $2 amid volatile trading, as markets weighed a potential U.S.–Iran diplomatic proposal and ongoing supply concerns.
Brent crude fell 1.76% to $107.11 per barrel, while U.S. West Texas Intermediate dropped 1.82% to $109.50 in mid-session trading.
Despite the pullback, recent gains remain significant. Last week, WTI surged 11% and Brent climbed 8%, marking their strongest rally since 2020.
Analysts note that access through key shipping routes remains politically sensitive, with uncertainty continuing to drive short-term price swings.
Global refiners are actively seeking alternative crude sources, particularly from the U.S. and North Sea, as traditional supply routes face disruptions.
Shipping activity shows mixed signals, with select vessels navigating critical passages, reflecting a selective approach to maritime access policies.
Meanwhile, spot premiums for U.S. crude have surged to record highs, driven by intensifying competition between Asian and European buyers.
OPEC+ announced a modest production increase for May, though output constraints among key producers suggest limited real supply relief in the near term.
