Oil prices rose in early Asian trade on Monday after renewed US-Iran hostilities over the weekend tested a fragile peace arrangement and shifted attention to planned talks in Qatar. Brent crude futures (LCOc1) rose 0.8% to $72.56 a barrel by 23:18 GMT.
USOIL – 5 Days Chart
Market Snapshot
The move partly reversed last week’s slide, when crude fell more than 10% as investors priced out some of the war-risk premium after Washington and Tehran reached an interim peace deal.
US West Texas Intermediate crude (CLc1) was quoted just above $69 a barrel in late Sunday trading. The gains were modest, reflecting both renewed supply concern and hopes that diplomacy could limit further disruption.
ANZ Research analysts said in a Monday note that “The market is likely to re-evaluate its assumption of a quick recovery of oil supply from the Persian Gulf.”
Weekend Flare-Up
The latest rise followed a new exchange of strikes between the United States and Iran around the Gulf. US officials accused Iran of threatening commercial shipping near the Strait of Hormuz, while Tehran said US strikes had breached the ceasefire framework.
Iran launched drone and missile attacks against targets in Bahrain and Kuwait after fresh US strikes on sites in southern Iran, according to reports. Kuwait said it intercepted missiles and reported no casualties. Bahrain said a residential building near its airport was damaged.
The US military said its strikes targeted Iranian surveillance, communications, air defence, drone storage and mine-laying facilities.
Diplomacy In Qatar
Oil’s advance was capped after Axios reported that both sides had agreed to halt hostilities and resume talks in Doha on Tuesday. The talks are expected to focus on maritime access through the Strait of Hormuz and the terms of a wider settlement.
Qatar and Pakistan helped bring US and Iranian representatives together earlier this month. The interim agreement gave both sides a window to work through details on shipping, sanctions relief and Iran’s nuclear programme.
Lebanon remains a complicating factor. Iran has pushed for a broader settlement to account for Israel-Hezbollah hostilities, while clashes in southern Lebanon have continued despite repeated ceasefire efforts.
Why Hormuz Matters
The Strait of Hormuz is one of the world’s most important energy chokepoints. The US Energy Information Administration has said flows through the waterway averaged 21 million barrels per day in 2018, equal to about 21% of global petroleum liquids consumption.
The passage links Gulf producers including Saudi Arabia, Iraq, the United Arab Emirates, Kuwait and Qatar to global markets. Only Saudi Arabia and the UAE have significant pipeline capacity to bypass it.
That makes even temporary disruption important for traders, refiners and governments. Higher freight costs, war-risk insurance and delayed tanker movements can quickly feed into crude prices and fuel inflation expectations.
Broader Market Impact
Crude had fallen sharply last week after shipping flows improved and prices returned close to pre-war levels. Brent settled at $71.99 on Friday, its lowest since February 26, while WTI closed at $69.23.
The weekend flare-up showed how quickly the risk premium can return. Traders said the market was balancing two signals: stronger physical flows through Hormuz and the risk that military incidents could again slow vessel traffic.
For energy importers in Asia and Europe, the issue is not only price. A prolonged dispute over routing, tolls or security guarantees could force buyers to seek alternative supplies and push up shipping costs.
Outlook
Traders will next watch whether Tuesday’s Doha talks proceed, whether tankers continue moving through the Strait of Hormuz without further incident, and whether the Israel-Hezbollah front adds pressure to the US-Iran negotiating track.
