Oil prices rose on Monday as fading expectations of a US-Iran peace breakthrough and slower tanker traffic through the Strait of Hormuz reinforced geopolitical risk concerns in the market.
Brent crude futures rose as much as 1% to $89.40 per barrel and were last trading up 72 cents at $89.20 by 0229 GMT. The US West Texas Intermediate crude futures rose 44 cents to $82.83 a barrel, Reuters reported.
Both contracts gained more than 5% last week following attacks on tankers operated by Abu Dhabi National Oil Company in the Hormuz strait and on a Saudi Aramco refinery.
Over the weekend, Iranian Foreign Minister Abbas Araghchi said Iran had not decided to resume talks with the US while US President Donald Trump urged Americans to accept slightly higher gasoline prices while the conflict continues.
"Oil prices have now rebounded almost completely from the lows seen in early August, as hopes for a more permanent resolution between the US and Iran have faded and geopolitical risk premiums have returned to the market," said Priyanka Sachdeva, head of market insights for Phillip Nova in Singapore.
"However, I see limited upside from here unless we get clear evidence of renewed aggression in the Strait of Hormuz, particularly material damage to tankers or oil infrastructure," she said.
Shipping through the Strait of Hormuz slowed over the weekend, data showed on Monday, following attacks on tankers.
Five commodity vessels transited the strait on Saturday, with none registered for Sunday, ship-tracking data from Kpler showed, versus 31 for the prior weekend.
The United Arab Emirates accused Iran of attacking a third vessel operated by ADNOC that was transiting the strait on Friday, the Emirati state news agency WAM reported, after blaming it for two other incidents involving ADNOC vessels in the strait on Thursday evening.
