Oil settled 1% higher as proposed US-Iran truce tempers Houthi blockade rally

Global crude benchmarks settled over 1% higher on Monday following a volatile session, as traders weighed a proposed US-Iran ceasefire against fresh supply threats from a Houthi naval blockade targeting Saudi Arabia.

The international Brent contract advanced $1.12 (1.27%) to settle at $89.22 a barrel, while US WTI gained 74 cents (0.90%) to close at $83.23.

Both benchmarks retraced from intraday highs of $91.42 and $85.39, respectively—their highest levels since mid-June—after reports emerged that mediators presented Tehran with a 10-day ceasefire proposal to revive last month's interim deal.

Upward pricing momentum was further constrained by a record 1.35 billion barrels of crude oil currently floating on water, according to Kpler estimates. However, acute geopolitical risks maintained an elevated price floor as Yemen’s Houthis declared a naval blockade against Saudi Arabia, placing approximately 2.5 million barrels per day of Red Sea bypass crude at immediate risk.

Supply anxieties deepened as Strait of Hormuz transits plunged to single digits—with just four vessels passing on Sunday—alongside fresh projectile attacks on commercial tankers off Oman.

Written by: Aiman Haikal