NEW DELHI/SINGAPORE: Global oil prices moved higher on Monday as hopes for a breakthrough in US-Iran negotiations weakened and shipping activity through the strategically vital Strait of Hormuz declined following recent vessel attacks.
Brent crude futures climbed as much as 1% to $89.40 a barrel before easing to around $89.20, up 72 cents, by 0229 GMT. US West Texas Intermediate futures also advanced, gaining 44 cents to $82.83 per barrel.
Both benchmarks posted gains of more than 5% last week after tankers linked to Abu Dhabi National Oil Company came under attack in the Strait of Hormuz and a Saudi Aramco refinery was reportedly targeted.
Iranian Foreign Minister Abbas Araqchi said over the weekend that Tehran had not yet decided whether to resume negotiations with Washington. Meanwhile, US President Donald Trump urged Americans to tolerate higher fuel prices as the conflict continues.
Market analysts said the renewed geopolitical uncertainty had restored some of the risk premium in crude prices after expectations of a lasting US-Iran settlement diminished.
“Oil prices have now rebounded almost completely from the lows seen in early August,” said Priyanka Sachdeva, head of market insights at Phillip Nova in Singapore, attributing the move to fading hopes of a permanent diplomatic resolution.
She cautioned, however, that further gains could remain limited unless tensions escalate significantly in the Strait of Hormuz, particularly through additional tanker damage or attacks on energy infrastructure.
Hormuz traffic drops sharply
Shipping activity through the Strait of Hormuz fell markedly over the weekend, according to vessel-tracking data.
Kpler data showed that only five commodity vessels crossed the waterway on Saturday, while no crossings were recorded on Sunday. This compared with 31 vessels during the previous weekend.
The United Arab Emirates has accused Iran of attacking a third ADNOC-operated vessel that was travelling through the strait on Friday. Abu Dhabi had earlier blamed Tehran for two attacks involving ADNOC vessels on Thursday evening.
The decline in maritime traffic has heightened concerns over potential disruptions to global energy supplies, as the Strait of Hormuz remains a critical route for international oil shipments.
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