Oil prices rose during early Asian trading on Monday after the escalation of the US-Iran standoff over the weekend cast doubt on a peace agreement between the two nations. Meanwhile, both sides, according to available information, have confirmed their readiness for new negotiations in Qatar this week.
Brent crude futures for August delivery increased by 0.8% to $72.56 per barrel as of 02:18. Prices recovered from a four-month low after the signing of a peace deal between the US and Iran prompted investors to gradually reduce the risk premium in oil prices.
Improved supply conditions also put pressure on oil prices, with transit volumes through the Strait of Hormuz nearing pre-war levels last week.
However, the renewed attacks over the weekend heightened concerns about the fragility of the temporary peace agreement between the US and Iran.
The US and Iran exchanged strikes late last week amid disagreements over Tehran’s claims to control the Strait of Hormuz. The attacks partially slowed shipping through the strait and pushed oil prices higher on Monday.
Nevertheless, the price increase was limited following an Axios report that the US and Iran had agreed to an immediate cessation of hostilities and new talks in Qatar.
Last week, oil fell more than 10% to pre-war levels after the US and Iran reached a temporary peace deal to resolve the conflict and start negotiations on a more comprehensive agreement.
At the same time, ongoing clashes between Israel and Lebanon remain a major sticking point in US-Iran relations, with Tehran insisting that Lebanon be included in any broad peace deal.
Israel and the Lebanese group Hezbollah continue armed confrontations in southern Lebanon despite numerous attempts to secure a ceasefire.
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