Brent crude slipped on Monday as traders booked profits, but prices remained above $108 a barrel as tensions over the Strait of Hormuz kept energy markets on edge.
Brent fell $1.72, or 1.6%, to $108.14 a barrel after reaching its highest level since May 19 on Friday. US West Texas Intermediate (WTI) crude was trading at about $100.54.
Why Brent crude is still elevated
The Strait of Hormuz, through which a large share of the world’s seaborne oil passes, remains at the centre of the conflict involving Iran, the United States and Israel.
Iran’s Revolutionary Guard has declared the strait closed, while the head of US Central Command, Admiral Brad Cooper, has said commercial traffic is continuing and the waterway remains open. Iran has also accused the United States of being responsible for insecurity in the strait.
Major fighting has paused, but diplomatic efforts have stalled, and reports say both sides are weighing their next steps.
Impact on travel and the region
The tensions are also affecting travel in the Gulf. Etihad Airways has cancelled its flights from Abu Dhabi to Dammam, Riyadh and Jeddah until October 24 after disruptions on October 19.
What it means for Pakistan
As a major oil importer, Pakistan is directly exposed to swings in crude prices. The latest easing allowed the government to cut petrol and diesel prices from October 20, but any fresh escalation in the Gulf could quickly push global prices and local fuel costs higher again.
