Key Points
- Momentum extends from the prior week into the following one
- Market pricing remains dominated by Hormuz-related shipping risk
- Gulf crude strength reflects tighter export logistics rather than production shifts
- OPEC+ supply increase has had a limited market impact amid physical constraints
ISLAMABAD: International oil markets opened the week on a firmer note, extending last week’s gains as traders continued to price in sustained supply disruption risk linked to the Strait of Hormuz.
Brent crude traded around $106–$107 per barrel, touching intraday levels near $107.9, marking an increase of roughly 1–2 per cent from the previous close.
West Texas Intermediate (WTI) advanced to about $95–$96.5 per barrel, also tracking similar gains as momentum carried over from the previous session.
The latest move reflects continuation rather than a fresh shock, with prices already supported in recent sessions by tightening Middle East flows and reduced confidence in stable shipping routes through the Gulf.
Market sentiment remains anchored in uncertainty over maritime flows through the Strait of Hormuz, a critical chokepoint for global crude exports.
Even limited indications of conditional or restricted passage have done little to ease concerns, as traders continue to price in the risk of prolonged logistical constraints.
The Organisation of the Petroleum Exporting Countries and its allies have announced a modest increase in production quota for May.
However, the adjustment announcement has had a limited impact on pricing dynamics as physical export bottlenecks outweigh upstream supply changes.
Refined products remain firm, with diesel and heating oil holding elevated levels, underscoring continued tightness in downstream supply chains.
Futures markets also continue to reflect backwardation, signalling near-term tightness in physical availability.
Gulf crude benchmarks moved broadly in line with global prices at the start of the week. Saudi Arabia’s Arab Light remained firm on steady Asian demand and constrained spot availability.
UAE’s Murban crude held support levels due to relatively more stable loading logistics. At the same time, Iraqi Basra grades also edged higher amid persistent sensitivity to Gulf shipping conditions and insurance costs.
Overall, the market continues to trade in a risk-premium regime driven less by short-term demand shifts and more by the expected duration of supply disruption.
Price action remains trend-led, with dips attracting buying interest as traders assess the longevity of constraints through the Gulf corridor.
