Oil climbs following renewed US, Iran strikes in Middle East
SINGAPORE, June 29 (Reuters) – Oil prices rose on Monday after tit-for-tat attacks by the United States and Iran that exposed the fragility of the interim peace deal and once again slowed energy shipments through the Strait of Hormuz.
Brent crude futures rose 58 cents, or 0.8%, to $72.57 a barrel at 02:07 GMT, while U.S. West Texas Intermediate crude was up 88 cents, or 1.3%, at $70.11 a barrel.
“There are still plenty of risks facing the oil market. Even so, participants appear to be focusing on what a continued recovery in oil flows will mean for global balance,” ING analysts wrote in a note on Monday. he said.
“This complacency is strange and clearly poses a serious upside risk if supply recovery is slow.”
Brent crude fell 10.6% last week, marking its third weekly decline after crude shipments through the strait rose last week to their highest level since the U.S.-Israeli war against Iran began in late February.
But as of Thursday, traffic has slowed following renewed attacks on ships in the strait, including a Qatar-bound oil tanker; These attacks marked the worst escalation of attacks by the United States and Iran since they signed an interim peace agreement.
Limiting increases in oil prices, Iran and the United States have agreed to halt recent hostilities in the Gulf and renew talks on the dispute over the Strait of Hormuz, a US official said on Sunday.
“The market will likely reconsider its assumption that oil supplies from the Persian Gulf will recover quickly,” ANZ analysts said in a note.
Saudi oil giant Aramco resumed crude oil loadings from its Ras Tanura terminal west of the Strait of Hormuz on Friday, which had been halted for nearly four months as oil producers increased production and exports ahead of an interim agreement.
Loading continued even after a company helicopter crashed in Ras Tanura on Sunday, killing 14 citizens. The cause of the accident was unknown.
“Physical flows are constrained by tanker backlogs, damaged infrastructure and production disruptions. It could take the rest of the year for supply to approach pre-conflict levels,” ANZ analysts said.
(Reporting by Florence Tan and Sudarshan Varadhan; Editing by Edmund Klamann, Sonali Paul and Thomas Derpinghaus)
