Oil prices gave up early gains on Monday after Iran indicated it was prepared to pursue negotiations with the United States based on its national interests, easing some concerns that had pushed crude prices to their highest levels in more than a month.
Brent crude futures slipped 14 cents, or 0.16%, to $87.96 a barrel after earlier climbing to $91.42, the highest level since June 11. US West Texas Intermediate (WTI) crude also retreated, falling 50 cents, or 0.61%, to $81.99 a barrel after reaching its strongest level since June 12.
The decline followed comments from Iran’s foreign ministry suggesting that diplomatic engagement with Washington remained possible despite continued military exchanges between the two countries.
Oil prices had surged earlier in the session after another weekend of escalating conflict in the Middle East. The United States carried out its ninth consecutive night of strikes against Iranian targets, while Kuwait and Bahrain reported additional attacks attributed to Iran.
Markets remain focused on developments around the Strait of Hormuz, one of the world’s most important energy shipping routes through which roughly one-fifth of global oil supplies pass. Concerns over possible disruptions to tanker traffic have supported higher crude prices in recent days.
The Islamic Revolutionary Guard Corps (IRGC) claimed on Monday that two oil tankers exploded and became disabled while travelling through what it described as an unsafe southern route in the Strait of Hormuz. Iranian officials alleged the vessels had been encouraged by the US military to use the route. Reuters said it could not independently verify the incident.
The United States and Iran have both taken actions affecting maritime traffic during the latest phase of the conflict. Washington says it is enforcing a naval blockade around Iranian ports, while Tehran has warned it will target vessels that violate its navigation rules in the Strait of Hormuz.
Adding to shipping concerns, the United Kingdom Maritime Trade Operations (UKMTO) centre reported that a vessel was on fire northwest of Oman’s Kumzar early on Monday. No immediate details were released about the cause of the incident or the condition of the ship.
Market analysts said uncertainty surrounding the conflict continues to dominate sentiment.
“The coming days and weeks will provide a clearer picture of the sustainable level of oil exports from the region under renewed dual blockades,” Barclays analyst Amarpreet Singh said in a research note.
He added that oil markets may be underestimating the impact of the conflict on global inventories, noting that stockpiles are already at their tightest levels in five years.
Shipping data from LSEG also pointed to reduced activity through the Strait of Hormuz. Four vessels transited the waterway on Sunday, down from eight the previous day. The data showed that since Friday at least three oil product tankers and one very large crude carrier had entered the strait to load cargo.
Although prices eased following Iran’s comments on possible negotiations, traders continue to monitor military developments and shipping activity closely, with the risk of further disruptions keeping energy markets on edge.
