Brent crude oil prices held steady at elevated levels on Monday, surpassing $88 per barrel and maintaining the gains recorded during the previous week. This development is attributed to ongoing tensions in the Middle East, which continue to fuel market caution over the prospect of fresh supply disruptions.
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Brent crude holds above $88, maintaining last week’s gains
Investors are closely monitoring conflicting reports regarding US-Iran relations, as well as developments surrounding the Strait of Hormuz, with geopolitical uncertainty continuing to weigh on markets. It is worth noting that over the weekend, Israel launched new strikes on Lebanon that killed 11 people, including a senior Hezbollah commander. Meanwhile, Donald Trump is also preparing new economic sanctions aimed at forcing Iran’s capitulation, as pressure mounts on his administration to bring the military campaign to a close.
Later in the day, the temporary ceasefire agreement between the US and Iran is set to officially expire, while negotiations over ending the conflict and reopening the Strait of Hormuz remain deadlocked. In the meantime, Middle Eastern producers are covertly shipping millions of barrels of crude oil through the waterway, helping to limit further price increases.
Finally, Iran and Oman also appear to be moving closer to an agreement on the management of the Strait of Hormuz, despite the fact that the United States is not participating in the talks.
