Oil prices were largely steady on Monday, holding on to gains recorded last week as hopes for a lasting US Iran peace deal weakened and concerns grew over possible disruptions to crude shipments through the Strait of Hormuz.
At the time of writing, Brent crude futures were unchanged at $88.55 a barrel, while US West Texas Intermediate crude slipped 14 cents to $82.26.
Both benchmarks gained more than 5% last week after attacks involving tankers operated by Abu Dhabi National Oil Company in the Strait of Hormuz and an attack on a Saudi Aramco refinery.
The renewed geopolitical risk has pushed crude prices sharply higher from their early August lows.
Hormuz shipping slows
Shipping activity through the strategic waterway also slowed over the weekend, adding to concerns about the security of one of the world’s most important oil transit routes.
Kpler data showed that only five commodity vessels crossed the Strait of Hormuz on Saturday, while no crossings were recorded on Sunday. That compares with 31 vessels during the previous weekend.
The United Arab Emirates accused Iran of attacking a third ADNOC operated vessel while it was transiting the strait on Friday.
The incident followed two other reported incidents involving ADNOC vessels on Thursday evening.
Peace hopes fade
Markets are also watching developments between Washington and Tehran closely.
Iranian Foreign Minister Abbas Araqchi said over the weekend that Iran had not decided whether to resume talks with the United States.
US President Donald Trump, meanwhile, urged Americans to accept somewhat higher gasoline prices as the conflict continues.
“Oil prices have now rebounded almost completely from the lows seen in early August,” said Priyanka Sachdeva, head of market insights at Phillip Nova in Singapore.
She said fading hopes of a permanent resolution between the US and Iran had brought geopolitical risk premiums back into oil markets.
Still, Ms Sachdeva expects limited further gains unless tensions escalate significantly in Hormuz.
She said a clearer trigger would be renewed aggression involving “material damage to tankers or oil infrastructure,” which could create a much stronger supply risk for global oil markets.
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