Oil prices rose as traders monitored geopolitical risks ahead of talks between the US and Iran that could resume on Tuesday.
Oil prices have risen more than 10% this year due to rising tensions with Iran — and potential supply disruptions in a region that pumps about a third of the world’s crude — overriding concerns about a global hegemony. (Reuters correspondent)Brent traded above $68 a barrel after its first back-to-back weekly drop this year, while West Texas Intermediate hovered around $64. According to the country’s semi-official Tasnim news agency, Iran’s Revolutionary Guards are conducting naval exercises “in the area” of the Strait of Hormuz, a vital waterway that transports about a fifth of the world’s barrels.
US President Donald Trump said Friday that regime change would be the best outcome for Iran, ratcheting up pressure on Tehran ahead of talks in Geneva.
Volume has proven thin so far with holidays in the US and Canada on Monday and China’s Lunar New Year all week.
Oil prices have risen more than 10% this year due to rising tensions with Iran — and potential supply disruptions in a region that pumps about a third of the world’s crude — overriding concerns about a global hegemony. Futures pared some of their gains as the risk of an impending strike faded and the International Energy Agency trimmed its demand growth forecast for this year.
“The U.S. and Iran are set to resume talks in Geneva on Tuesday and crude oil markets are sitting idly by to see what the future holds,” said Bjarne Schieldrop, chief commodity analyst at SEB AB. “When/if tensions with Iran finally fade, we will likely see Brent crude retreat to the $60” level and below.
US-led talks to end the war in Ukraine are also due to begin in Geneva on Tuesday, although the prospect of a quick end to the nearly four-year-old conflict and the return of Russian barrels appears slim. Taman seaport infrastructure and fuel tanks were damaged in a drone attack on the Black Sea coast over the weekend.