Oil came roaring back on Monday. WTI crude climbed 4.4% to $94.69 a barrel, and Brent added 4.7% to reach $97.64. Both benchmarks erased the losses that built up late last week, when Friday left WTI at $90.54, its weakest close in a week.
The peace bet unravels
The turn happened over the weekend. Renewed Iranian strikes on Kuwait and Oman, paired with drones launched toward the Strait of Hormuz, drained the optimism that had pushed crude down on Thursday. Only days earlier, traders were leaning on a Lebanon ceasefire and a fresh round of US-Iran contacts to cool the war. Crude has whipsawed for weeks on that tug-of-war, swinging from above $110 in mid-May to near $90 on Friday. The same nerves that sent oil sliding on the ceasefire news snapped back the moment the missiles started flying again.
Hormuz is still the chokepoint
Everything still runs through Hormuz. Close to a fifth of the world's oil normally moves through the slim channel that separates Iran from Oman, and most of it remains stranded. Swiss bank UBS told clients it sees almost no sign that tanker traffic has picked up, ceasefire chatter or not. Iran first threatened to seal the strait more than a week ago, and the channel has stayed mostly shut since.
OPEC's paper barrels
OPEC+ gave traders no reason to relax. On Sunday the group waved through another output increase for July, lifting quotas by 188,000 barrels a day. It was the fourth such increase since the strait shut. Saudi Arabia and Russia took the largest pieces, 62,000 barrels a day each. On paper, that points to more oil heading to market. In reality it changes little, because the Gulf members cleared to pump extra still can't move those barrels past the blockade. Higher targets are easy to publish. Loading them onto ships is the hard part.
What to watch
Two things will decide where prices go next: whether the strikes keep landing, and whether any tankers genuinely start crossing Hormuz again. Fuel markets moved with crude on Monday. US gasoline futures firmed to $3.15 a gallon and heating oil to $3.74. Natural gas broke ranks, slipping 2.2% to $3.16 per million British thermal units, a reminder that this rally is about Gulf shipping, not energy across the board. For now, every fresh attack points prices higher. A real, confirmed reopening of the strait could turn them just as fast. OPEC has months of paused output waiting to come back.