OIL prices rose on Monday as investors reassessed supply risks in the Strait of Hormuz following renewed military exchanges between the United States and Iran, even as both countries signalled a willingness to resume diplomatic negotiations aimed at preserving an interim peace agreement.
Brent crude futures gained 52 cents, or 0.67 per cent, to US$72.51 a barrel, while US West Texas Intermediate crude rose 71 cents, or 1.03 per cent, to US$69.94.
The gains came after several days of renewed attacks on shipping through the Strait of Hormuz slowed maritime traffic once again, underscoring the fragility of the ceasefire reached earlier this month.
The disruption followed attacks on vessels, including a Qatar-linked oil tanker, which triggered fresh military strikes by both Washington and Tehran in the most serious escalation since the two sides agreed to a temporary peace framework.
Analysts said the latest developments have prompted traders to reconsider expectations of a rapid recovery in Gulf energy exports.
"The market is likely to re-evaluate its assumption of a quick recovery of oil supply from the Persian Gulf," analysts at ANZ said.
The advance in crude prices was tempered by reports that the United States and Iran had agreed to suspend recent hostilities and resume negotiations in Qatar over the future of the Strait of Hormuz, raising hopes that tensions could ease if diplomacy progresses.
Despite the renewed talks, analysts cautioned that logistical bottlenecks continue to limit physical oil supplies.
"Despite the U.S.-Iran deal marking an inflection point for oil markets, physical flows are constrained by tanker backlogs, damaged infrastructure and production shut-ins," Reuters cited ANZ saying.
"It could take the remainder of the year before supply is near pre-conflict levels."
Adding to the market's focus on supply, Saudi Aramco resumed crude loadings from its Ras Tanura export terminal on Friday after operations had been suspended for nearly four months, as Gulf producers accelerated exports ahead of the interim agreement.
Loading operations continued despite a helicopter crash involving an Aramco aircraft in Ras Tanura on Sunday that killed 14 people. Saudi authorities said the cause of the accident remains under investigation.
Meanwhile, the US dollar remained firmly supported by expectations that the Federal Reserve will maintain a restrictive monetary policy.
The US Dollar Index (DXY) traded around the 101.35-101.50 range, holding near multi-month highs as investors continued to favour dollar-denominated assets.
Market expectations for another Federal Reserve interest rate increase later this year have strengthened following resilient US labour market conditions, persistent underlying inflation and robust manufacturing activity.
The stronger dollar has also coincided with a correction in artificial intelligence-related equities, encouraging investors to rotate capital into the US currency and other dollar-based assets.
The combination of resilient US economic data and continuing uncertainty over Middle East energy supplies is expected to keep both the dollar and oil markets highly sensitive to further geopolitical developments in the coming weeks. - June 29, 2026
