Brent crude and West Texas Intermediate (WTI) oil prices were dropping more than five percent each, Naeem Aslam, CIO at Zaye Capital Markets, highlighted in a market analysis sent to Rigzone on Monday.
“Brent crude is confirmed near $91.73 per barrel, down 5.2 percent, while West Texas Intermediate trades near $84.45, down 5.4 percent,” Aslam pointed out in the analysis.
“The immediate decline reflects a reduction in the geopolitical premium after the temporary pause in U.S.-Iran attacks lowered fears of disrupted Gulf exports and safer passage through the Strait of Hormuz,” he added.
“Oil remains highly sensitive to shipping security, tanker movements, and energy infrastructure because any renewed disruption could quickly restore the supply-risk premium,” he warned.
In the analysis, Aslam noted that U.S. President Donald Trump’s “statement that the United States remains ‘locked and loaded’, alongside warnings of further military punishment and his insistence that Iran cannot obtain a nuclear weapon, prevents the market from treating the current de-escalation as permanent”.
Aslam said continued negotiations are weighing on crude by reducing the probability of near-term supply losses, but warned that fresh attacks on tankers, Saudi infrastructure, or regional shipping routes could reverse the decline.
“Tariffs also create a two-way effect,” Aslam stated.
“Domestic investment and industrial expansion may support energy use, while higher costs, weaker trade and tighter financial conditions could reduce global fuel demand,” he highlighted.
Also in the analysis, Aslam noted that yesterday’s U.S. housing data added a mildly bearish demand signal.
“New home sales increased 1.6 percent month over month to a 628,000 annualized rate, but remained 5.6 percent below June 2025,” he said.
“The median selling price fell 3.3 percent to $398,300, the average price stood at $475,400, and available supply remained elevated at 9.3 months,” he added.
“These figures indicate stabilization without strong expansion, suggesting that construction, freight and household activity are not generating enough momentum to create a major increase in petroleum demand,” he continued.
Aslam went on to state in the analysis that there are no important economic releases scheduled today and projected that oil prices will be driven primarily by geopolitical headlines, the U.S. dollar, shipping conditions, inventory expectations, and positioning ahead of later-week data.
He also warned in the analysis that “current demand estimates remain divided”.
“OPEC projects approximately 0.8 million barrels per day of global oil demand growth in 2026, while the IEA presents a softer consumption outlook and continued uncertainty over supply recovery,” Aslam said.
“Stronger economic data later in the week could lift demand expectations and support crude, while weaker activity or rising inventories would reinforce downside pressure unless renewed Middle East escalation disrupts supply,” he added.
In a market quick take posted on Saxo Bank’s website on Monday, the bank stated that a two-night pause in U.S. strikes on Iran pulled oil sharply lower and reset the risk mood before Wednesday’s Fed decision.
“Brent crude fell as much as 7.4 percent at Monday’s open, briefly dipping below $90 a barrel, and was trading near $88 into the European morning,” Saxo Bank highlighted, adding that WTI “fell about five percent to around $85”.
“The move reverses part of last week’s surge that briefly took Brent above $100, a level last seen in late May,” it added.
“The global benchmark is still up more than 50 percent this year. Houthi claims of attacks on Saudi targets keep a residual risk premium in place, and oil vol OVX held near 68, still the most elevated corner of the vol complex,” it stated.
In a market quick take posted on its website on Friday, Saxo Bank highlighted that crude oil had closed above $100 per barrel for the first time since May, “with Brent up about seven percent to $100.69 and WTI near $92, leaving oil up roughly 38 percent this month”.
“The bid reflects Houthi attacks on Red Sea tankers, President Trump’s threat of a ‘massive attack’ on Iran, and strikes on the Caspian Pipeline Consortium terminal that handles most Kazakh crude,” the bank noted in that quick take.
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