Oil prices traded little changed on Monday after the United States and Iran agreed to suspend recent military action, easing immediate concerns over energy supplies even as producers across the Middle East continued exporting crude and liquefied natural gas following fresh security incidents.
The two countries also agreed to resume negotiations over the Strait of Hormuz, raising hopes that an interim peace agreement can be preserved after several days of retaliatory strikes threatened to derail diplomatic progress.
Brent crude futures edged 4 cents higher to US$72.03 a barrel by 08:03 GMT, while U.S. West Texas Intermediate crude gained 44 cents, or 0.6%, to US$69.67 a barrel.
“There’s still plenty of risk facing the oil market. Even so, participants appear to be … focusing on what a continued recovery in oil flows would mean for the global balance,” ING analysts said in a note on Monday.
“This complacency is odd and clearly leaves significant upside risk if the supply recovery proves slow.”
Brent crude declined 10.6% last week, marking its third consecutive weekly loss, after crude shipments through the Strait of Hormuz reached their highest level since the U.S.-Israeli conflict with Iran began in late February.
Despite renewed attacks on vessels and recent military exchanges between Washington and Tehran, Middle Eastern producers have continued loading oil and LNG cargoes, according to shipping data.
Saudi energy giant Aramco resumed crude exports from its Ras Tanura terminal on Friday after operations had been suspended for almost four months.
Loading activity continued even after one of the company’s helicopters crashed at Ras Tanura on Sunday, killing 14 people. Authorities have not yet determined the cause of the accident.
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