Oil prices fell in choppy trading on Monday as investors awaited clarity on talks between the U.S. and Iran and remained cautious about sustained supply losses caused by shipping disruptions.
Brent crude futures (LCOc1) fell 64 cents, or 0.6%, to $108.39 a barrel at 1109 GMT. U.S. West Texas Intermediate (CLc1) crude futures were down 1.2%, or $1.33, at $110.21 per barrel.
Price movements in Asian trading on Monday were overshadowed by an 11% surge in WTI and an 8% rise in Brent during the previous session on Thursday - the largest absolute price increases since 2020.
The U.S. and Iran received a framework plan to end hostilities, but Iran rejected immediately reopening the Strait of Hormuz after President Donald Trump threatened to rain "hell" on Tehran if it did not reach a deal by the end of Tuesday.
Iran also said it had formulated its positions and demands in response to recent ceasefire proposals conveyed via intermediaries.
The Strait of Hormuz, which carries oil and petroleum products from Iraq, Saudi Arabia, Qatar, Kuwait and the United Arab Emirates, remains largely closed due to Iranian attacks on shipping following the outbreak of war on 28 February.
Some vessels, however - including an Omani-operated tanker, a French-owned container ship and a Japanese-owned gas carrier - have passed through the Strait of Hormuz since Thursday, according to shipping data, reflecting Iran’s policy of allowing passage to vessels from countries it considers more friendly.
"The market is trying to realise what to expect going forward. The most important headline this weekend has been that some ships passed through the Strait," said SEB Research analyst Ole Hvalbye.
Hvalbye also noted that Europe continued to lose physical barrels and refined products to Asia due to tightening market conditions.
Supply disruptions in the Middle East have prompted refiners to seek alternative crude sources, particularly physical cargoes from the U.S. and Britain’s North Sea. Spot premiums for U.S. West Texas Intermediate crude have surged to record highs amid competition between Asian and European refiners.
Indian refiners have also postponed maintenance shutdowns at their facilities to meet domestic fuel demand.
On Sunday, OPEC+, comprising members of the Organization of the Petroleum Exporting Countries and allies including Russia, agreed to a modest output increase of 206,000 barrels per day for May.
However, the decision is expected to remain largely theoretical, as several key producers in the group are unable to raise output due to the war.
Saudi Arabia also set the official selling price of its May Arab Light crude to Asia at a record premium of $19.50 a barrel above the Oman/Dubai average, up $17 from the previous month, according to Aramco.
Meanwhile, Russian supply has recently been disrupted by Ukrainian drone attacks on export terminals in the Baltic Sea. Media reports on Sunday said the Ust-Luga terminal resumed loadings on Saturday after several days of disruption.
Exports from the Black Sea port of Tuapse are expected to rise to 794,000 metric tonnes in April, up 8.7% on a daily basis from 755,000 metric tonnes planned for March, according to two traders and Reuters calculations.
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Iran and Israel said on Monday (8 June) they had halted attacks on each other following an appeal from U.S. President Donald Trump, as Axios reported that Trump had privately told Benjamin Netanyahu “be careful, or you will be on your own very soon”.
Start your day informed with the AnewZ Morning Brief. Here are the top stories for the 8 June, covering the latest developments you need to know.
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Donald Trump said he is “in no hurry” to reach a deal with Iran, insisting the U.S. is slowly getting what it wants. He warned military action remains an option if talks fail. Meanwhile, U.S. forces said they fired a missile at a vessel trying to breach Washington’s blockade of Iran.
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Iran and Israel have halted strikes on each other, but Tehran has warned it will recommence attacks if Israel continues military action in Lebanon. U.S. President Donald Trump and Lebanese President Joseph Aoun have meanwhile made pleas for peace.
Iran and Israel have halted strikes on each other, but Tehran has warned it will recommence attacks if Israel continues military action in Lebanon. U.S. President Donald Trump and Lebanese President Joseph Aoun have meanwhile made pleas for peace.
Sirens rang out across multiple areas of Israel on Sunday night after missiles were launched from Iran towards the country, the Israeli military said. Earlier, Tehran's top negotiator in talks with the U.S. threatened to target Israeli and American assets in the region, after Israel struck Beirut.
U.S. President Donald Trump acknowledged calling Israeli Prime Minister Benjamin Netanyahu “crazy” during a phone exchange over fighting in Lebanon. The call came as the U.S. was attempting to broker an end to hostilities involving Iran.
Iran’s Revolutionary Guards (IRGC) said on Monday they targeted the source of an attack on a telecom facility on Sirik Island near the strategic Strait of Hormuz, Tasnim News Agency reported.
Iran really wanted to make a deal with the U.S. and that it would be a good one for Washington and its allies, President Donald Trump said on Monday.
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