Oil prices were little changed amid volatile trading on Monday, as investors await clarity on the negotiations between the United States and Iran, while concerns persist over tightening supplies due to maritime shipping disruptions.
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Brent crude futures rose 73 cents, or 0.7%, to reach $109.76 per barrel by 0338 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures edged down 26 cents, or 0.2%, to $111.28 per barrel.
Price movements in Asian trading on Monday were subdued compared to the previous session on Thursday, which saw WTI surge by 11% and Brent by 8%—the largest absolute price increase since 2020.
On Sunday, President Trump escalated pressure on Tehran in a social media post during Easter, threatening to target Iranian power plants and bridges on Tuesday if the strategic Strait of Hormuz is not reopened. Despite this, prices remained largely stable today.
Axios reported on Sunday, citing four U.S., Israeli, and regional sources, that the U.S., Iran, and a group of mediating nations are considering terms for a potential 45-day ceasefire that could lead to a permanent end to the war.
The Strait of Hormuz, a vital artery for oil and petroleum products from Iraq, Saudi Arabia, Qatar, Kuwait, and the UAE, remains largely closed due to Iranian attacks on vessels following the outbreak of war on February 28.
"The inability to open the Strait of Hormuz is increasingly becoming a matter of political victory," said Mukesh Sahdev, founder and CEO of the consultancy Ex-Analysts.
Due to supply disruptions from the Middle East, refineries are seeking alternative sources of crude, particularly shipments from the United States and the British North Sea. However, shipping data showed that some vessels—including an Omani-operated tanker, a French-owned container ship, and a Japanese-owned gas carrier—have crossed the Strait since Thursday, reflecting Iran's policy of allowing passage for ships from nations it considers "friendly."
On Sunday, the OPEC+ alliance agreed to a modest production increase of 206,000 barrels per day (bpd) for May. However, this decision is expected to remain largely "on paper," as key producers within the group are unable to hike output due to the ongoing war.
Additionally, Russian supplies have recently faced disruptions following Ukrainian drone attacks on its Baltic Sea export terminal. Media reports indicated on Sunday that the Ust-Luga terminal resumed loading operations on Saturday after a several-day hiatus.
Source: Reuters
