Oil futures advanced early Monday as the U.S. and Iran exchanged strikes over the weekend, raising the risk of prolonged disruptions to energy flows through the Strait of Hormuz. ICE Brent crude briefly moved above $90 per barrel in early Asian trading, up from Friday’s settlement, as traders reassessed supply risks tied to the Persian Gulf chokepoint.
The U.S. conducted targeted strikes on Iranian launchers following intelligence suggesting imminent mining operations in the Strait of Hormuz, a critical transit route for roughly 5 million barrels per day of crude. Iran retaliated with missile strikes on a U.S. base in Jordan, which were intercepted. Analysts warn that further escalation could deter shipping through the strait, where flows have recently stabilized at 6-8 million barrels per day after earlier disruptions.
Speculative positioning data released late last week showed money managers reduced their net long position in ICE Brent by 28,299 lots to 223,598 lots as of Aug. 26, driven primarily by long liquidations. The adjustment followed a period of easing tensions and signs of increased oil flows from the Persian Gulf.
Russia’s weekend announcement that it would extend its diesel export ban by another month until the end of September added to supply tightness in global diesel markets. The restriction compounds existing pressures from Persian Gulf disruptions and intensifying Ukrainian attacks on Russian energy infrastructure. Russia ranks as the world’s second-largest diesel exporter.
European gas prices also climbed in early trading as LNG flows from the Persian Gulf remained constrained. QatarEnergy extended force majeure declarations for some buyers through early November, indicating that Northern Hemisphere markets may enter the 2026/27 winter without Qatari LNG supply. Tight winter-ready inventories heighten the risk of price spikes later in the year.
In metals, gold edged lower on Friday after Federal Reserve Chair Kevin Warsh reiterated the central bank’s focus on returning inflation to 2%, signaling a higher-for-longer rate environment. The hawkish remarks strengthened the U.S. dollar and weighed on non-yielding assets. While geopolitical risks and central bank purchases provide underlying support, analysts expect gold to remain sensitive to incoming U.S. inflation and labor data.
Ukraine’s Agriculture Ministry reported a smaller winter sowing area for the 2026/27 season, though domestic consumption accounts for only about 25% of total wheat output. Grain exports totaled 822,000 metric tons in August, just 21% of potential capacity, as Danube ports and railways remain the primary export routes amid ongoing Black Sea tensions.
France’s Agriculture Ministry downgraded its crop ratings, with only 28% of the country’s wheat rated good to excellent as of Aug. 24, down from 62% a year earlier due to summer heatwaves. Meanwhile, money managers reduced their net short position in CBOT wheat by 12,314 lots to 14,171 lots, while speculative net longs in CBOT corn surged to 376,513 lots, the highest since April 2022, amid tightening global supplies and Black Sea disruptions.
