Oil slips from five-month high with Hormuz transits in focus

Oil prices declined on Monday as traders took profits from recent record highs, with attention centered on the possibility that conflicts in the Middle East and Ukraine could disrupt the global oil supply-demand balance. Brent crude futures slid $1.34, or 1.22%, to $108.52 a barrel, after reaching their highest since May 19 on Friday.

US West Texas Intermediate crude fell 13 cents, or 0.13%, to $101.28 a barrel, after closing last week at a five-month high. The Strait of Hormuz remains a concern, as ongoing attacks on vessels and low flows persist, providing some support. UBS analyst Giovanni Staunovo noted these issues. A fire and explosion on a tanker in the southern Hormuz strait last Sunday, as reported by Iranian media, reduced Gulf crude flows to about 8.5 million barrels per day, down from over 20 million bpd the previous week, according to analytics firm Kpler.

At least 10 confirmed incidents involving commercial vessels were reported last week. SEB analyst Bjarne Schieldrop warned that Iran may intensify attacks ahead of the November 3 US midterm elections. Egypt pledged to assist Saudi Arabia in defending its security and stability against Yemen's Iran-allied Houthis, potentially heightening tensions in the Middle East.

US President Donald Trump signed an executive order waiving some sanctions and tariffs on Russian exports, following a deal with Russian President Vladimir Putin to export diesel to the United States and other countries. Secretary of State Marco Rubio said Trump will take up to 60 days to evaluate the sanctions' impact on the global economy, though this move is seen as an attempt to keep oil prices stable ahead of the US midterm elections.