Oil prices gain while US and Iran return to peace talks

Oil prices rose in early Monday trading despite the US and Iran agreeing to suspend current hostilities in the Middle East and return to the negotiating table to strike a peace deal.

Brent crude futures were up 0.8 percent to $72.57 a barrel at 02:07 GMT, while US West Texas Intermediate crude gained 1.3 percent to $70.11 a barrel.

Brent dropped nearly 11 percent last week after the number of crude vessels passing through the Strait of Hormuz rose to its highest level since the war began on February 28.

Tehran launched attacks on Bahrain and Kuwait on Sunday following US strikes on several infrastructure assets in Iran. A cargo vessel was hit by a projectile in the strait last week.

Technical talks are expected to continue on all areas of the interim peace pact, Reuters reported, quoting an unidentified US official.

A 14-point interim agreement was agreed on June 17, under which the strait would be reopened to traffic.

Dutch bank ING said the oil market faced “plenty of risks”, pointing to significant upside if the supply recovery proves slow, Reuters reported.

However, loadings continued at Saudi Aramco’s Ras Tanura terminal, the report said, despite a helicopter operated by the oil major crashing on Sunday, killing 14 nationals.

Further reading:

• Iran sanctions thaw unlikely to sway global businesses
• Shipowners reluctant to risk the Strait of Hormuz
• US waiver on Iranian oil may spark regional price scramble