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Oil prices remained elevated on Monday, with Brent crude trading at $97.67 per barrel, up $1.39 on the day, as traders continued to monitor escalating geopolitical tensions and shipping disruptions in the Middle East. The benchmark contract is hovering near multi-week highs as concerns over crude flows through the Strait of Hormuz underpin market sentiment.

Major financial media reports indicate that crude markets have been supported by renewed security incidents involving vessels operating in and around the Strait of Hormuz. Recent exchanges involving U.S. and Iranian forces, as well as attacks on commercial shipping, have heightened fears of a prolonged disruption to energy supplies from the Gulf region. Traffic through the strategic waterway has fallen significantly, with shipping data showing the lowest transit volumes since May.

According to Jonathan Squires, CEO of Tapaas, oil prices have remained close to multi-week highs following renewed security incidents involving tankers in the Gulf over the weekend.

"Oil prices remained near a multi-week high amid renewed security incidents involving tankers in the Gulf over the weekend. The latter could sustain concerns over regional export flows. Traffic through the Strait of Hormuz remains restricted, and crossings continue at low volumes. While tensions continue to push prices to the upside, ongoing efforts to maintain energy exports help cap increases to some extent," Squires said.

Market participants are also closely watching developments in Tehran following reports that Iran could reach an agreement with Oman regarding management of transit through the Strait of Hormuz.

"Any improvements in shipping conditions in the waterway could help push oil prices down. However, markets could remain cautious ahead of any material development," Squires added.

Analysts note that the Strait of Hormuz remains one of the world's most important energy chokepoints, making any disruption to shipping activity a significant factor for global oil prices. Investors fear that further restrictions on tanker movements could tighten physical supply availability and increase volatility across energy markets.

While geopolitical risks continue to provide upward momentum, gains have been tempered by hopes that diplomatic engagement could eventually ease tensions and improve shipping conditions. Market attention is also focused on efforts by regional producers and governments to maintain export flows and minimise supply disruptions.

Looking ahead, geopolitical developments are expected to remain the primary driver of oil prices. A deterioration in transit conditions through the Strait of Hormuz could sustain upward pressure on crude, particularly given concerns over limited strategic reserve buffers. Conversely, any signs of renewed diplomatic negotiations or measures that improve maritime security could reduce the geopolitical risk premium currently embedded in the market and weigh on prices.