Oil prices settled more than 1% higher on Monday after US and Iranian attacks underscored the fragility of their interim peace deal. Brent crude futures settled up $1.16, or 1.61%, at $73.15 a barrel, while US West Texas Intermediate crude gained $1.52, or 2.2%, to $70.75. This comes after Brent crude fell 10.6% last week, marking a third consecutive weekly decline, as crude shipments through the Strait of Hormuz rose to their highest since the US-Israeli war on Iran began in late February.
Outbound Persian Gulf crude exports are quickly rebounding to at least 75% of pre-war levels, according to Gelber & Associates analysts. However, analysts cautioned that traffic through the strait is far from being fully recovered, which helped keep prices somewhat elevated. Bob Yawger, director of energy futures at Mizuho, noted that it's unrealistic to expect a rapid return to pre-war shipping levels given the ongoing risks of attacks on vessels.
Complicating matters, Iranian Deputy Foreign Minister Kazem Gharibabadi stated that Iran will begin talks with Omani experts to redefine transit paths through the Strait of Hormuz and will attempt to obstruct vessels outside of these defined paths. Mines in the waterway and insurance companies not yet being fully on board also contribute to hindering full recovery of traffic. Despite these issues, Saudi oil giant Aramco resumed crude oil loadings at its Ras Tanura terminal on Friday, after a nearly four-month halt, even following a helicopter crash in the area on Sunday.
