SINGAPORE: Oil prices were up more than 1 percent on Monday as peace talks between the US and Iran stalled while shipments through the Strait of Hormuz remained limited, keeping global oil supplies tight.
Brent crude futures rose $1.35, or 1.3 percent, to $106.68 a barrel by 07:53 a.m. Saudi time, retreating from early session gains of over $2 a barrel. US West Texas Intermediate was at $95.35 a barrel, up 95 cents, or 1 percent.
Last week, Brent and WTI gained nearly 17 percent and 13 percent, respectively, the biggest weekly gains since the start of the war.
Hopes of reviving peace efforts receded during the weekend when US President Donald Trump scrapped a planned trip to Islamabad by his envoys Steve Witkoff and Jared Kushner, even as Iranian Foreign Minister Abbas Araqchi arrived in Pakistan.
“President Trump’s recent post on Truth Social, urging to shoot and kill any Iranian boat laying mines in the Strait of Hormuz, alongside his claims of having full control over Hormuz, has continued to fuel elevated war premiums,” said Priyanka Sachdeva, analyst at Phillip Nova.
Tehran has largely closed the strait while Washington has imposed a blockade of Iran’s ports. Traffic through the Strait of Hormuz remained limited, with just one oil products tanker entering the Gulf on Sunday, shipping data from Kpler showed.
Goldman Sachs raised its oil price forecasts for the fourth quarter to $90 a barrel for Brent crude and $83 for WTI, citing reduced output from the Middle East.
“The economic risks are larger than our crude base case alone suggests because of the net upside risks to oil prices, unusually high refined product prices, products shortages risks, and the unprecedented scale of the shock,” GS analysts led by Daan Struyven said in a note on Sunday.
