Oil Prices Hold Steady After US-Iran Truce

Global oil prices were little changed on Monday after the United States and Iran agreed to halt recent hostilities and resume talks aimed at easing tensions around the Strait of Hormuz.

Brent crude edged up four cents to USD 72.03 a barrel, while U.S. West Texas Intermediate crude rose 44 cents, or 0.6%, to USD 69.67 a barrel.

The agreement eased concerns over potential disruptions to energy supplies through the Strait of Hormuz, a key shipping route for global oil and liquefied natural gas exports. Market sentiment was also supported by the continued flow of crude and LNG shipments from producers in the Middle East despite recent attacks on commercial vessels.

Analysts said attention is shifting towards the recovery in global oil supply, although uncertainty remains. ING analysts warned that markets could be underestimating the risk of renewed supply disruptions if the recovery loses momentum.

Brent crude fell 10.6% last week, extending losses for a third consecutive week after oil shipments through the Strait of Hormuz reached their highest level since fighting involving the United States, Israel and Iran escalated earlier this year.

Saudi energy company Aramco resumed crude loadings at its Ras Tanura export terminal on Friday after operations were suspended for nearly four months. Loading activities continued after a helicopter crash at the terminal on Sunday killed 14 Saudi nationals. Authorities have not yet identified the cause of the crash.

The outcome of renewed talks between Washington and Tehran is expected to remain a key factor for global energy markets. It is not yet clear when the next round of negotiations will take place.

SOURCE: Reuters