LONDON: Global oil prices rose on Monday after renewed military exchanges between the United States and Iran heightened concerns over energy supplies and disrupted shipping through the Strait of Hormuz, despite both sides agreeing to resume diplomatic talks.
Brent crude futures gained 58 cents, or 0.8%, to $72.57 per barrel, while US West Texas Intermediate (WTI) crude rose 88 cents, or 1.3%, to $70.11 per barrel in early trading.
The gains followed several days of US-Iran strikes and counterstrikes that underscored the fragility of the interim peace agreement reached on June 17. Renewed attacks on vessels in the Strait of Hormuz, including a Qatar-linked oil tanker, slowed maritime traffic through the world’s most critical energy shipping corridor.
Market analysts said investors are increasingly reassessing expectations for a rapid recovery in Gulf oil exports. ING noted that markets appear overly optimistic about the pace of supply normalization, warning that any delay in restoring production and shipping could push prices significantly higher.
Brent crude had fallen 10.6% last week—its third consecutive weekly decline—as crude shipments through the Strait of Hormuz reached their highest level since the outbreak of the US-Israel-Iran conflict in late February. However, shipping activity has slowed again following the latest escalation.
On Sunday, Washington and Tehran agreed to suspend hostilities and resume technical negotiations over the Strait of Hormuz dispute, offering cautious optimism for regional stability. Nevertheless, analysts warned that physical oil flows remain constrained by tanker backlogs, damaged infrastructure and production shutdowns.
ANZ analysts said oil supply from the Persian Gulf is unlikely to return to pre-conflict levels before the end of the year, citing ongoing logistical challenges and infrastructure damage.
Meanwhile, Saudi energy giant Aramco resumed crude loadings at its Ras Tanura export terminal on Friday after a suspension of nearly four months as producers increased exports ahead of the interim agreement. Operations continued despite a company helicopter crash at Ras Tanura on Sunday that killed 14 people. The cause of the accident remains under investigation.