Oil prices edged lower in Asian trading on Monday after a strong rally last week.
Continued uncertainty in US-Iran relations, as well as the situation around the Strait of Hormuz, are limiting overall price declines.
Brent crude futures fell 0.16% to $88.42 per barrel as of 4:04 AM, while West Texas Intermediate futures fell 0.2% to $81.31 per barrel.
Brent rose more than 5% last week amid the ongoing confrontation between the US and Iran, as Tehran launched new strikes on energy infrastructure in West Asia. Shipping through the Strait of Hormuz has also slowed following Iranian attacks on tankers in the region, while the US maintains a naval blockade against Tehran.
The conflict in West Asia has opened a new front in the Red Sea: Iran-backed Yemeni Houthi rebels continue to attack vessels in the Bab el-Mandeb Strait. Attacks in the region threaten to further destabilize oil supplies in West Asia.
Concerns about supply cuts have significantly outweighed the weakening global oil demand forecasts published by leading industry organizations last week. Both the Organization of the Petroleum Exporting Countries and the International Energy Agency have lowered their demand forecasts for 2026.