International oil prices held steady on Monday following an agreement between Iran and the United States to pause recent hostilities in the Persian Gulf region. Oil-producing nations in the Middle East continued with crude oil and liquefied natural gas loading operations despite new vessel attacks.
The two nations also agreed to restart negotiations concerning the Strait of Hormuz, offering hope for salvaging a provisional peace agreement that had been threatened by days of retaliatory strikes.
At the time of writing, Brent crude futures were trading at $72.03 per barrel, up 4 cents, while US West Texas Intermediate crude was at $69.67, up 44 cents.
Analysts at ING noted that the oil market still faces numerous risks, but participants appear more focused on the implications for the global supply-demand balance from the ongoing recovery in crude supply. This level of complacency is somewhat unusual, as a slow recovery in supply would clearly present significant upside risk.
Brent crude had fallen 10.6% last week, marking its third consecutive weekly decline, as crude shipments transiting the Strait of Hormuz reached their highest level since the US-Iran conflict began in late February.
Shipping data indicates that Middle Eastern oil producers are continuing with crude and LNG loading operations despite new vessel attacks in the Strait of Hormuz and renewed retaliatory strikes between the US and Iran. Saudi oil giant Aramco resumed crude loading operations at its Ras Tanura terminal, located west of the Strait of Hormuz, on Friday after a suspension of nearly four months. These loading operations continued on Sunday following a helicopter crash at the company that resulted in 14 national fatalities, the cause of which remains unclear.
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