Oil prices rose slightly awaiting clarity on the state of US-Iran negotiations
Kyiv • UNN
Brent and WTI prices rose amid expectations of negotiation outcomes and the closure of the Strait of Hormuz. OPEC+ agreed to a slight increase in production for May.
Oil prices rose slightly on Monday amid volatile trading, as investors awaited clarity on the status of US-Iran negotiations and remained concerned about sustained supply losses due to shipping disruptions, UNN writes, citing Reuters.
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Brent crude futures rose 0.1% to $109.13 a barrel by 13:26 GMT (16:26 Kyiv time). US West Texas Intermediate crude futures gained 0.69%, or 77 cents, to $112.31 a barrel.
On Monday, price fluctuations in Asian trading were negligible compared to the 11% jump in WTI crude prices and the 8% rise in Brent crude prices in the previous trading session on Thursday, which was the largest absolute price increase since 2020.
The US and Iran received a framework plan to end hostilities, but Iran rejected an immediate opening of the Strait of Hormuz after US President Donald Trump threatened to unleash "hell" on Tehran if it did not reach a deal by the end of Tuesday.
Iran also stated that it had formulated its positions and demands in response to recent ceasefire proposals conveyed through intermediaries.
The Strait of Hormuz, through which oil and petroleum products are transported from Iraq, Saudi Arabia, Qatar, Kuwait, and the United Arab Emirates, remains largely closed due to Iranian attacks on shipping after the war began on February 28.
However, according to shipping data, some vessels have passed through the Strait of Hormuz since Thursday, including a tanker operated by Oman, a container ship owned by France, and a gas carrier owned by Japan. This reflects Iran's policy of allowing passage to vessels from countries it considers more friendly, the publication writes.
"The market is trying to understand what to expect in the future. The most important news this weekend was that some vessels passed through the strait," said SEB Research analyst Ole Hvalbye.
Hvalbye also noted that Europe continues to lose physical barrels and refined products to Asia due to tightening market conditions.
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Supply disruptions from the Middle East have forced refiners to seek alternative sources of crude, especially for physical deliveries to the US and UK North Sea. Spot premiums for US West Texas Intermediate crude have jumped to record highs due to competition between Asian and European refiners.
Indian refiners have also postponed planned shutdowns of their units to meet local fuel demand.
On Sunday, OPEC+, which includes some members of the Organization of the Petroleum Exporting Countries and allies such as Russia, agreed to a small production increase of 206,000 barrels per day in May.
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"OPEC's actions appear to be hampered by export availability," said Rystad analyst Janiv Shah.
Saudi Arabia also set the official selling price for Arab Light crude for May to Asia at a record high of $19.50 a barrel above the Oman/Dubai average, which is $17 more than the previous month, Aramco said.
Meanwhile, supplies from Russia have been disrupted recently due to drone attacks on export terminals in the Baltic Sea. On Sunday, media reported that the Ust-Luga terminal resumed loading on Saturday after several days of disruptions.
Exports from the Black Sea port of Tuapse are expected to increase to 794,000 metric tons in April, an 8.7% daily increase compared to the 755,000 metric tons planned for March, according to forecasts.