Oil prices reversed early gains on Monday after Iran’s foreign ministry said negotiations with the U.S. could be pursued based on national interests.
Benchmark prices had earlier touched more than one-month highs on concern over disruption to shipments through the Strait of Hormuz.
Brent crude futures were down 16 cents, or 0.18%, at $87.94 (R1448.12) a barrel by 11:22am after hitting $91.42 (R1498.50) for their highest since June 11.
U.S. West Texas Intermediate crude was down 68 cents, or 0.82%, at $81.81 after touching its loftiest level since June 12 at $85.39.
Intermediaries have shared messages with Tehran over recent days, Iran’s foreign ministry spokesperson Esmaeil Baghaei said on Monday without specifying what the proposals entailed.
“Comments from Iran’s foreign ministry spokesperson saying that the country has received new proposals from mediators have seen oil prices giving up all earlier gains, though flows through the Strait of Hormuz remain depressed,” said UBS analyst Giovanni Staunovo.
Drop in tanker traffic from Gulf
Prices had earlier extended last week’s hefty gains, driven by recent hostilities between the U.S. and Iran that have restricted oil shipments through the Strait of Hormuz.
The Middle East conflict escalated over the weekend, with the U.S. conducting a ninth straight night of attacks against Iran while U.S. allies Kuwait and Bahrain reported more Iranian strikes.
The Islamic Revolutionary Guard Corps said on Monday that two oil tankers had been immobilised after explosions as they attempted to transit what it described as an unsafe southern route through the Strait of Hormuz, alleging they had been encouraged by the U.S. military to use that passage.
Reuters was unable to obtain immediate verification of events.
“The supply narrative has become more bearish. The anticipated recovery in shipping has effectively stalled, with Strait of Hormuz transit volumes falling to single digits,” ANZ analysts said in a note.
Four vessels made the transit through the Strait of Hormuz on Sunday, down from eight the previous day, LSEG data showed. At least three oil products tankers and one very large crude carrier have entered the strait since Friday to load oil, the data showed.
A vessel was on fire northwest of Oman’s Kumzar, the United Kingdom Maritime Trade Operations centre said early on Monday.
Gulf countries boosted crude oil and condensate exports in the first half of July to their highest since before the Iran war began in late February, shipping data showed, though flows through the Strait of Hormuz are now slowing as fighting escalates.
The collapse of a U.S.-Iran truce has reignited concerns over energy supplies moving through the strait. Before the Iran war, about 20% of global oil supplies flowed through the waterway. Iran has also pressed the Houthis to close the Red Sea route if the U.S. attacks Iranian power infrastructure.
- Oil prices initially rose to over a one-month high due to concerns over disrupted shipments through the Strait of Hormuz but later declined after Iran indicated possible negotiations with the U.S. based on national interests.
- Brent crude fell to $87.94 per barrel and U.S. West Texas Intermediate crude dropped to $81.81 after earlier reaching highs not seen since mid-June.
- Recent hostilities between the U.S. and Iran have severely restricted oil tanker traffic through the Strait of Hormuz, with the number of transiting vessels dropping sharply.
- The Islamic Revolutionary Guard Corps reported explosions immobilizing two oil tankers in the strait, claiming these ships were directed to risky routes by the U.S. military, though verification is lacking.
- Despite increased crude exports from Gulf countries in early July, fears over energy supply disruptions persist amidst the escalating conflict and a collapse of the U.S.-Iran truce.
Oil prices reversed early gains on
Benchmark prices had earlier touched more than one-month highs on concern over disruption to shipments through the Strait of Hormuz.
Brent crude futures were down 16 cents, or 0.18%, at $87.94 (R1448.12) a barrel by 11:22am after hitting $91.42 (R1498.50) for their highest since June 11.
U.S. West Texas Intermediate crude was down 68 cents, or 0.82%, at $81.81 after touching its loftiest level since June 12 at $85.39.
Intermediaries have shared messages with Tehran over recent days, Iran's foreign ministry spokesperson Esmaeil Baghaei said on
"Comments from Iran’s foreign ministry spokesperson saying that the country has received new proposals from mediators have seen oil prices giving up all earlier gains, though flows through the Strait of Hormuz remain depressed," said UBS analyst Giovanni Staunovo.
Prices had earlier extended last week's hefty gains, driven by recent hostilities between the U.S. and Iran that have restricted oil shipments through the Strait of Hormuz.
Reuters was unable to obtain immediate verification of events.
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Four vessels made the transit through the Strait of Hormuz on
A vessel was on fire northwest of Oman's Kumzar, the United
Gulf countries boosted crude oil and condensate exports in the first half of July to their highest since before the Iran war began in late February, shipping data showed, though flows through the Strait of Hormuz are now slowing as fighting escalates.
