Oil prices rebounded on Monday after reports that the United States and Iran had agreed to halt attacks against each other following a fresh military flare-up over the weekend, easing fears of a prolonged escalation in the Middle East.
Brent crude rose as much as 1.9% to $73.39 a barrel before trimming some gains, while West Texas Intermediate traded near $70 a barrel. The recovery comes after heightened tensions saw the US strike Iranian military targets in retaliation for Tehran’s attack on a commercial vessel near the Strait of Hormuz, one of the world’s most critical oil shipping routes.
According to an Axios report citing US officials, Washington and Tehran have agreed to meet in Doha on Tuesday for further discussions aimed at preventing further escalation. The prospect of renewed diplomacy helped improve market sentiment after days of volatility driven by fears over potential supply disruptions.
The latest flashpoint involved the Kiku, a very large crude carrier transporting around 2 million barrels of Qatari crude, which was struck near the Strait of Hormuz. The vessel last transmitted its position off Fujairah in the United Arab Emirates. While commercial shipping through the strait had begun recovering following an earlier interim understanding between the two sides, the latest attacks prompted some vessels to delay or abandon planned transits.
The US Central Command said commercial shipping through the Strait of Hormuz continues, although shipowners remain cautious as hundreds of vessels are still waiting to exit the Persian Gulf.
Separately, Saudi Arabia reported that a helicopter operated by Saudi Aramco crashed near Ras Tanura, the kingdom’s key oil hub. Authorities did not disclose the cause of the incident or whether it affected energy infrastructure.