Oil Gains as US-Iran Tensions Renew Hormuz Supply Fears

Global oil prices moved up on Monday after renewed tensions between the United States and Iran reignited concerns over the reopening of the Strait of Hormuz. Brent crude, the international oil benchmark, gained nearly 0.9 per cent as fresh US-Iran hostilities over the weekend raised fresh uncertainty about whether maritime traffic in the region could return to normal operations anytime soon. By 03:30 GMT, Brent futures for August delivery were trading at $73.21 per barrel, marking an increase of $1.27 compared to prices recorded before the conflict involving the US and Israel against Iran began on February 28. Market analysts said the rebound reflected investors reassessing earlier optimism surrounding the ceasefire agreement. Media quoted experts as saying that oil markets had erased much of the geopolitical risk premium too quickly, despite the MoU lacking enforcement guarantees and violence continuing in the region. Last week’s attack on a commercial vessel, followed by the latest exchange of strikes, served as a reminder that tensions remain far from resolved. The latest escalation began after US Central Command announced strikes targeting Iran on Friday and Saturday, claiming Tehran had attacked two commercial vessels passing through the Strait of Hormuz, a waterway responsible for transporting nearly one-fifth of global oil and liquefied natural gas trade during normal conditions. Iran responded by launching missiles and drones aimed at US military facilities in Bahrain and Kuwait. Several international media outlets later reported that Washington and Tehran had agreed to halt further attacks and resume negotiations aimed at ending the conflict. According to Axios, officials from both sides are expected to meet in Doha, Qatar, on Tuesday for fresh talks, although Iranian authorities have not yet publicly confirmed either the ceasefire understanding or the planned negotiations. Pakistan Eyes Cheap Iranian Oil, Gas Imports After Islamabad MoU