LONDON – Oil prices rose 1% on Monday, reversing earlier losses, supported by the absence of a U.S.-Iran peace deal, even as the U.S. said it would help secure safe passage for ships stranded in the Strait of Hormuz.
Brent crude futures were up $1.22, or 1.1%, to $109.39 a barrel at 0909 GMT after settling down $2.23 on Friday. U.S. West Texas Intermediate was up $1, or 1%, at $102.94 a barrel, after a $3.13 loss on Friday.
“The path for prices remains skewed to the upside as long as flows through the Strait remain restricted,” UBS analyst Giovanni Staunovo said.
President Donald Trump said the U.S. would begin efforts to assist ships stranded in the Strait of Hormuz, but prices stayed above $100 a barrel, with no peace deal in sight and shipping through the strategic waterway still constrained.
Iran’s military, in response, warned U.S. forces on Monday not to enter the strait, adding that its forces would “respond harshly” to any threat.
Negotiations between the U.S. and Iran continued over the weekend, with both sides assessing each other’s responses.
Trump has made securing a nuclear deal with Tehran a priority, but Iran wants to defer nuclear talks until after the war and first lift rival blockades on Gulf shipping.
Meanwhile, the United Kingdom Maritime Trade Operations agency said on Monday a tanker had reported being hit by unknown projectiles while transiting near Fujairah in the United Arab Emirates.
On Sunday, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, said it would raise oil output targets by 188,000 barrels per day in June for seven members, marking the third consecutive monthly increase.
The rise matches that agreed for May, minus the share of the United Arab Emirates, which left OPEC on May 1. However, the additional barrels are expected to remain largely on paper as long as the Iran war continues to disrupt Gulf oil supplies through the Strait of Hormuz.
