Brent Crude Nears $93 As Geopolitical Risks Continue To Pressure Markets
Investors track stalled negotiations and Strait of Hormuz risks.
Oil prices rebounded on Monday after touching their lowest levels in six weeks, as investors reassessed the likelihood of a near-term breakthrough in negotiations between the United States and Iran. Brent crude rose toward $93 a barrel after closing Friday at its weakest level since mid-April, while US benchmark West Texas Intermediate traded near $89 a barrel. The gains reflected renewed caution among traders amid lingering uncertainty over the future of Middle East energy supplies.
Market sentiment shifted after reports indicated that Washington and Tehran exchanged proposed amendments to a draft agreement over the weekend. The proposed deal is intended to extend the current ceasefire and create a framework for reopening the Strait of Hormuz, a critical maritime route for global oil shipments. However, despite ongoing diplomatic engagement, neither side has signalled that a final agreement is imminent, leaving investors wary of potential disruptions.
The Strait of Hormuz remains the central factor influencing oil markets. The strategically important waterway handles a significant share of global seaborne crude exports, and its near-total closure since the conflict escalated has severely disrupted energy flows. Although optimism surrounding a possible diplomatic resolution contributed to crude oil's first monthly decline of the year, prices remain substantially higher than they were before the conflict began in late February.
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US President Donald Trump said following a White House Situation Room meeting on Friday that he expected an extension of the existing truce with Iran to be announced. He also reiterated Washington's demands that Tehran suspend its nuclear programme and restore the Strait of Hormuz to its status as an open international shipping route. These issues continue to form the core of negotiations aimed at reducing tensions and stabilising global energy markets.
Geopolitical concerns have been compounded by developments elsewhere in the Middle East. Israel expanded military operations in Lebanon over the weekend as Hezbollah intensified attacks in northern Israel. While these events are not directly linked to the US-Iran negotiations, the broader regional instability has heightened concerns over energy security and contributed to ongoing volatility in oil markets.
Despite the uncertainty, there have been some tentative signs of improvement in regional energy logistics. Reports indicate that roughly a quarter of the non-Iranian large oil tankers stranded in the Persian Gulf since the conflict began have managed to leave the area. While the situation remains fragile, the movement of vessels has offered a modest indication that supply bottlenecks could gradually ease if diplomatic efforts continue to make progress.
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