Oil prices rose on Monday as uncertainty over the reopening of the Strait of Hormuz kept traders cautious, despite signs that Iran and Oman were nearing an agreement on new shipping routes.
Brent crude futures gained 91 cents, or 1.09 percent, to $84.46 a barrel by 0056 GMT. US West Texas Intermediate crude rose 61 cents, or 0.78 percent, to $78.79 a barrel.
The gains came after both benchmarks fell more than 7 percent last week as hopes grew that an agreement between Iran and Oman could help reopen the key waterway.
The Strait of Hormuz is a major route for global energy supplies. About a fifth of the world’s oil passed through the strait before the conflict disrupted shipping.
Iran said on Sunday that a deal with Oman to establish new shipping lanes was in its final stages. Tehran, however, made it clear that reopening the waterway would depend on Washington meeting other conditions.
Those conditions include compensation to Iran for what Tehran described as widespread US attacks.
“Traders have been conditioned by the on-again, off-again nature of the negotiations,” said Tim Waterer, chief market analyst at KCM Trade. He added that markets were waiting for clear signs, such as verified tanker movements or formal agreements, before removing more of the risk premium from oil prices.
Iranian Foreign Minister Abbas Araqchi also said Tehran was not in talks with the US and would not begin negotiations while Washington continued to breach an interim agreement signed in June.
The risk to oil supplies was highlighted further by an attack on a Saudi oil facility over the weekend.
The Iran-aligned Houthis said on Sunday that they had targeted Saudi Aramco’s Jazan refinery. The attack came two days after Saudi Arabia signed a defence pact with Turkiye and Pakistan amid rising tensions in the region.
There were also fresh concerns over shipping through the Strait of Hormuz. Abu Dhabi National Oil Company, or ADNOC, said on Friday that 15 of its vessels had been attacked while passing through the waterway since the conflict began.
For oil markets, the uncertainty means the risk premium is likely to remain elevated. Traders are now looking for concrete evidence that shipping can resume safely before pricing in a full reopening of the strait.
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