Oil prices climbed on Monday as renewed military exchanges between the United States (US) and Iran raised concerns over energy supplies and shipping through the Strait of Hormuz, one of the world’s most important oil transit routes.
Brent crude futures rose 58 cents, or 0.8%, to $72.57 per barrel, while US West Texas Intermediate (WTI) crude gained 88 cents, or 1.3%, to trade at $70.11 per barrel.
The gains followed several days of tit-for-tat strikes between the US and Iran, which highlighted the fragility of their interim peace agreement and disrupted tanker traffic through the Strait of Hormuz. Shipping activity had previously recovered to its highest level since the conflict began in late February, but recent attacks on commercial vessels have again slowed the movement of oil exports.
Market analysts said investors remain concerned about the pace of supply recovery despite reports that Washington and Tehran have agreed to pause hostilities and resume negotiations over regional tensions and maritime security.
Analysts at ING said the oil market still faces considerable risks, although many participants appear focused on the eventual recovery of oil flows. They warned that any delays in restoring normal supply could push prices higher.
ANZ analysts also noted that the market may need to reassess expectations for a rapid recovery in Persian Gulf oil exports, citing ongoing logistical challenges, damaged infrastructure and production disruptions.
Saudi Arabia’s state-owned oil company Aramco resumed crude loadings at its Ras Tanura export terminal on Friday after operations had been suspended for nearly four months. Export activity continued despite a helicopter crash at the facility on Sunday that killed 14 people. Authorities have not yet determined the cause of the accident.
Analysts said tanker backlogs, infrastructure damage and production shutdowns could continue to limit crude supplies, adding that oil output and exports may not fully recover to pre-conflict levels until later this year.
Markets are expected to closely monitor developments in US-Iran negotiations and shipping conditions in the Strait of Hormuz, which remain key drivers of global energy prices.