Oil prices gave back part of their earlier gains on Monday after comments from an Iranian foreign ministry spokesperson raised the possibility of renewed talks with the United States based on Iran’s national interests.
By 05:00 ET (09:00 GMT), Brent crude was trading 0.2% higher at $88.26 a barrel after earlier touching $90.75, its highest level in more than five weeks. U.S. West Texas Intermediate crude fell 0.4% to $82.18 a barrel.
US-Iran conflict continues to support crude prices
The latest price swings came as the United States carried out military strikes against Iran for a ninth consecutive day, adding to concerns that shipping through the Strait of Hormuz could remain disrupted.
Iran said two oil tankers had been struck and disabled, while the Islamic Revolutionary Guards Corps claimed responsibility for attacks targeting U.S. aircraft in Jordan as well as American military assets in Kuwait and Syria.
Authorities in Bahrain also confirmed that emergency warning sirens had sounded on Monday morning.
The renewed military exchanges have raised fresh questions over the security of one of the world’s most important energy shipping routes, with markets closely monitoring any threat to oil flows through the Strait of Hormuz.
Supply outlook remains tight
ANZ analysts said, “The supply narrative has become more bearish. The anticipated recovery in shipping has effectively stalled, with Strait of Hormuz transit volumes falling to single digits.”
They added that although U.S. crude production has increased, it has not materially changed the overall market balance, while declining global inventories continue to support crude oil and refined fuel prices.
Brent has remained highly volatile since fighting intensified in late February. Prices briefly surged above $110 a barrel before falling back towards $70 after the June ceasefire agreement. However, renewed hostilities have once again injected uncertainty into global energy markets.
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