Oil prices retreated from earlier highs on Monday after an Iranian foreign ministry spokesperson said there was still scope for negotiations with the United States if they aligned with the country’s national interests.
Brent crude, the international benchmark, was up 0.2% at $88.26 a barrel by 05:00 ET (09:00 GMT), after earlier climbing to a more than five-week high of $90.75 a barrel. U.S. West Texas Intermediate crude slipped 0.4% to $82.18 a barrel.
Middle East tensions continue to support oil markets
The United States carried out military operations against Iran for a ninth consecutive day, reinforcing concerns that commercial shipping through the Strait of Hormuz could remain heavily disrupted.
The latest strikes followed reports from Iran that two oil tankers had been hit and disabled. Tehran’s Islamic Revolutionary Guards Corps also said it had launched attacks against U.S. aircraft at an airport in Jordan, as well as American military assets in Kuwait and Syria.
Bahrain’s interior ministry also confirmed that emergency warning sirens were activated on Monday morning.
The renewed exchange of military action comes only weeks after the United States and Iran agreed to a ceasefire framework that has since largely broken down. Investors continue to monitor developments closely, given the importance of the Strait of Hormuz as a key route for global energy supplies.
Supply concerns remain despite easing prices
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.”
The bank added that although U.S. oil production has increased, it has not significantly changed the broader supply picture, while declining global inventories continue to keep crude and refined fuel markets relatively tight.
Brent has experienced sharp swings since the conflict escalated in late February. Prices briefly exceeded $110 a barrel before retreating to around $70 following the June ceasefire agreement. However, the latest escalation has once again increased volatility across global energy markets.