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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U.S. negotiators Steve Witkoff and Jared Kushner will visit Russia then Ukraine over the weekend, Russian state news agency TASS has reported, citing an unnamed source. Ukrainian President Volodymyr Zelenskyy has also said American envoys will visit the capitals of both countries.
U.S. negotiators Steve Witkoff and Jared Kushner have arrived in Moscow for peace talks on the Russia-Ukraine conflict, two people familiar with the matter said. They were met by Russian Presidential Envoy Kirill Dmitriev.
U.S. efforts to squeeze Iran’s economy through an oil blockade and sanctions are becoming increasingly difficult for Tehran to withstand, according to three senior Iranian sources. Washington is escalating pressure in hopes of securing concessions in future negotiations.
Start your day informed with the AnewZ Morning Brief. Here are the top stories for the 4th of September, covering the latest developments.
An Iranian tanker was hit by U.S. forces on Saturday near Iran's key oil export hub, Kharg Island, in the Gulf, the semi-official Iranian news agency Tasnim reported.
An Iranian tanker was hit by U.S. forces on Saturday near Iran's key oil export hub, Kharg Island, in the Gulf, the semi-official Iranian news agency Tasnim reported.
U.S. efforts to squeeze Iran’s economy through an oil blockade and sanctions are becoming increasingly difficult for Tehran to withstand, according to three senior Iranian sources. Washington is escalating pressure in hopes of securing concessions in future negotiations.
The Iranian Health Ministry said at least 18 people were killed and 142 others injured in U.S. airstrikes carried out between 30 August and 2 September.
The Iranian Army has again struck at U.S. bases in Kuwait and the United Arab Emirates in retaliation for U.S. attacks on southern and western parts of Iran late on Tuesday, which reportedly killed 18 people and injured more than 100 others.
The U.S. has launched a fresh wave of strikes on Iran, targeting Islamic Revolutionary Guard Corps (IRGC) sites as Tehran retaliated against U.S. positions across the region, while Iranian officials said at least five people were killed and dozens wounded at a wedding near Sirik.
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