Crude oil today: Prices hover near pre-war levels as weekend strikes test shipping recovery

American drivers and energy markets are tied directly to the stability of global supply routes, making the volatile situation in the Middle East a critical factor for domestic wallets. Crude oil prices experienced mixed and volatile trading on Monday following a weekend marked by retaliatory military strikes between the United States and Iran. The sudden escalation has injected fresh uncertainty into global markets just as commercial shipping through the strategically vital Strait of Hormuz had begun to show signs of a gradual post-war recovery.

The Backstory

Energy prices have been highly volatile since late February, when the outbreak of war between the United States, Israel, and Iran led to the effective blockade of the Strait of Hormuz. The waterway serves as a critical conduit for about one-fifth of the global trade in oil and liquefied natural gas (LNG). When Iran closed the strait following initial attacks on February 28, the sudden disruption to the global balance sent shockwaves through energy sectors, pushing U.S. retail regular gasoline to a peak average of $4 a gallon by April.

A diplomatic breakthrough emerged on June 17 when U.S. President Donald Trump and Iranian President Masoud Pezeshkian signed a Memorandum of Understanding (MOU). This agreement established a 60-day window for comprehensive negotiations regarding Tehran's nuclear program and broader measures to bring an end to the war. Market optimism grew further after U.S. Treasury Secretary Scott Bessent announced a 60-day waiver of sanctions on the purchase of Iranian oil, helping drive crude prices downward toward their pre-conflict benchmarks.

Here's What Happened

The fragile diplomatic momentum faced a severe test over the weekend. On Saturday, a drone strike hit the Panamanian-flagged tanker M/T Kiku, which was transiting the strait carrying more than two million barrels of crude oil. In response, U.S. Central Command deployed fighter jets on Friday and Saturday to strike 10 Iranian military targets, including missile and drone storage locations and coastal radar sites. Iran quickly retaliated by launching a series of missiles and drones targeting U.S. military assets located in Bahrain and Kuwait.

Following the intense weekend exchanges, international benchmark Brent crude futures rose about 0.9 percent early Monday to hit $73.21 a barrel, before dipping slightly to $71.90. Meanwhile, U.S. West Texas Intermediate (WTI) futures rose 0.4 percent to trade at $69.52 per barrel, paring back earlier gains after briefly crossing the $70 threshold. By late Sunday, diplomatic mediators from Qatar and Pakistan confirmed that Washington and Tehran had established a direct communication line, agreeing to pause active hostilities and allow commercial vessels safe passage through the waterway.

What People Are Saying

The geopolitical friction prompted a sharp warning from the White House regarding the compliance of the cease-fire terms.

United States aircraft just struck Iranian missile and drone storage locations, and coastal radar sites, for violating the Cease Fire Agreement, AGAIN! There may come a point when we are no longer able to be reasonable, and will be forced to militating complete the job that we very successfully started.

Market specialists note that investors may be underestimating the persistent friction in the Persian Gulf. Fabien Yip, a market analyst at IG in Sydney, observed that the partial rebound in Brent prices reflects a market that had run too quickly on ceasefire optimism, adding that Thursday's attack on a commercial vessel served as a distinct reality check. Similarly, Pratibha Thaker, regional director of Middle East and Africa at the Economist Intelligence Unit, noted that while oil prices have fallen back to pre-conflict levels, risks still remain as markets watch the region closely.

The Bigger Picture

Despite the weekend violence, tracking data compiled by Kpler shows that commercial maritime traffic is continuing to move, albeit at lower volumes than before the war. From Friday through Sunday, the transit tracking group recorded a daily average of 23 vessel crossings. While this marks a clear improvement from the single-digit transits seen during the height of the fighting in April, it is substantially lower than the pre-war norm of roughly 130 to 138 daily crossings. Hundreds of cargo ships remain anchored in the Gulf waiting for stable passage.

For consumers in the US, the primary question centers on how fast lower crude prices will translate into relief at the pump. The national average for regular gasoline has dropped to about $3.93 a gallon from its $4 peak in April, but it still sits well above pre-war baselines. President Trump addressed this disparity directly during an Oval Office briefing, telling reporters that oil prices have come down significantly but pump prices are not yet dropping in comparison the way they should be. In response, the American Petroleum Institute noted that retail fuel prices do not move in exact lockstep with crude oil markets.

The Road Ahead

High-level diplomacy is scheduled to resume immediately to prevent the conflict from fully re-escalating. Delegations from both the United States and Iran are slated to hold technical talks in Doha, Qatar, on Tuesday to further clarify the terms of the MOU and establish concrete enforcement details for the 60-day de-escalation period. Meanwhile, U.S. Central Command and maritime advisory firms like Marisks will continue providing specific routing guidance to commercial vessels navigating the southern corridors of the strait to ensure safe transit away from naval mines and military obstacles.

Frequently Asked Questions

Why are oil prices fluctuating if a memorandum of understanding was signed?
While the MOU signed on June 17 established a 60-day period for negotiations, it lacked specific enforcement details. Weekend drone strikes on commercial shipping and subsequent military responses from both the U.S. and Iran have renewed fears of sudden supply disruptions, causing prices to swing between ceasefire optimism and conflict risks.

How many ships are currently crossing the Strait of Hormuz?
According to Kpler tracking data, the waterway averaged about 23 transits per day over the weekend. This is a significant increase from the single-digit transits recorded during the peak of the conflict in April, but it remains well below the peace-time average of more than 130 crossings daily.

Why haven't gas prices in the US dropped faster as crude oil fell?
Retail gasoline prices typically do not move in immediate lockstep with global crude oil benchmarks. According to the American Petroleum Institute, refining costs, regional distribution structures, and lagging retail adjustments mean pump prices take longer to decline than volatile crude futures.

What are the next formal steps in the US-Iran negotiations?
Official delegations from the U.S. and Iran are scheduled to convene in Doha, Qatar, on Tuesday. These technical talks are intended to address unresolved areas of the MOU, establish safe commercial shipping rules, and solidify terms to permanently end the hostilities.