Oil Prices Retreat from Morning Spike as Strait of Hormuz Tensions Ease

Global oil benchmarks retreated from early-session highs Monday afternoon as Middle East tensions showed signs of easing, with West Texas Intermediate (WTI) crude trading at $81.33 per barrel, according to live price data. The U.S. benchmark was down $0.45 (-0.55%) on the day, while Brent Crude traded at $87.90, down $0.23%.

The midday pullback followed a volatile morning where prices briefly spiked on renewed conflict. According to OilPrice.com, Brent Crude briefly broke above $90 per barrel in Asian trade after fresh U.S. strikes on Iran and retaliatory attacks by Tehran targeting U.S. bases and vessels in the Strait of Hormuz. The U.S. Central Command stated strikes would continue "degrading Iranian military capabilities used to attack commercial vessels," while Iran's Revolutionary Guard Corps claimed two oil tankers were immobilized after attempting to transit the strait.

The escalation pushed vessel owners to pause transits through the critical chokepoint, rekindling concerns about global oil supply. However, OilPrice.com reported that prices fell back as U.S. trading began and after U.S. Central Command indicated a "weekend wave of strikes" had been completed.

The week-long surge in crude is now flowing through to consumers. OilPrice.com reported the national average price for a gallon of regular gasoline climbed back above $4 on Monday to $4.0030, according to AAA data. This marks an increase from $3.8720 per gallon just one week ago. Patrick De Haan, head of petroleum analysis at GasBuddy, had predicted the return to $4 gasoline within 7-10 days following last week's 16% jump in oil prices.

For Bakken operators, the price environment remains supportive despite the day's retreat. The live data shows the Bakken crude differential holding at a discount of $3.42 per barrel versus WTI. The sustained higher price level is boosting industry cash flows, as evidenced by international operators. Rigzone reported that Norwegian producer Aker BP posted record cash flow from operations of $3.12 billion in the second quarter, driven by higher oil and gas prices.

The price action highlights the continued sensitivity of the market to geopolitical risk in the Middle East, with weekend escalations repeatedly driving early-week volatility. For North Dakota producers, the current prices well above $80 WTI, even with the local differential, provide a robust economic backdrop for ongoing operations and development in the play.