International oil prices advanced on Monday, influenced by a series of recent attacks and clashes between the United States and Iran. The continued exchange of fire underscores the fragility of the temporary peace agreement, leading to a renewed slowdown in energy shipping through the Strait of Hormuz.
At 06:27 GMT, Brent crude futures rose by 45 cents, or 0.6%, to $72.44 per barrel, while US West Texas Intermediate crude futures increased by 82 cents, or 1.2%, to $70.05 per barrel.
Analysts at a major Dutch bank noted in a report on Monday, "The crude oil market remains fraught with risks. Even so, market participants appear focused on the potential impact on the global supply-demand balance from a sustained recovery in crude shipments."
"This optimistic outlook seems counterintuitive. Should the restoration of crude supply fall short of expectations, there is significant upside potential for oil prices."
Last week, crude oil shipments through the Strait of Hormuz reached their highest level since the outbreak of US-Iran tensions in late February, contributing to a 10.6% decline in Brent crude and marking its third consecutive weekly loss.
However, starting Thursday, multiple new vessel attacks occurred within the Strait, including one on a Qatari-linked tanker. This prompted retaliatory strikes from both sides, escalating the conflict to its most intense level since the signing of the temporary truce and subsequently cooling shipping activity in the Strait once more.
A US official disclosed on Sunday that the two nations had agreed to halt recent hostilities in the Gulf region and resume negotiations concerning the Strait of Hormuz dispute, a development that capped further gains in oil prices.
Analysts from an Australian bank stated in a report, "The market may need to reassess its expectations for a rapid recovery in crude supply from the Persian Gulf."
Saudi Arabia's state-owned oil giant, Saudi Aramco, resumed crude loading operations at the Ras Tanura oil terminal, located west of the Strait of Hormuz, on Friday. The port had been shut down for nearly four months. Major oil-producing nations had been ramping up production and exports ahead of the implementation of the temporary agreement.
On Sunday, a Saudi Aramco helicopter crashed at the Ras Tanura port, resulting in the deaths of 14 Saudi nationals. Loading operations at the port continued normally, with the cause of the accident still under investigation.
Analysts from the Australian bank added, "Persistent constraints on the physical flow of crude—such as vessel backlogs, infrastructure damage, and field shutdowns—mean that supply may not approach pre-conflict levels until near the end of this year."
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