Oil climbs following renewed US, Iran strikes in Middle East

SINGAPORE: Oil prices rose on Monday following days of tit-for-tat strikes by ​the U.S. and Iran that underscored the fragility of their interim peace ‌deal and again slowed energy shipping through the Strait of Hormuz.

Brent crude futures climbed 45 cents, or 0.6%, to $72.44 a barrel at 0627 GMT while U.S. West Texas Intermediate crude was at $70.05 a barrel, ​up 82 cents, or 1.2%.

"There's still plenty of risk facing the oil market. Even ​so, participants appear to be ... focusing on what a continued recovery in ⁠oil flows would mean for the global balance," ING analysts said in a note ​on Monday.

"This complacency is odd and clearly leaves significant upside risk if the supply recovery ​proves slow."

Brent crude fell 10.6% last week, its third weekly decline, after crude shipments through the strait rose last week to their highest level since the U.S.-Israeli war on Iran began in late February.

However, traffic has ​since slowed following renewed attacks on ships in the strait from Thursday, including a Qatar-linked ​oil tanker, that triggered strikes from the U.S. and Iran in the worst escalation since they signed ‌an interim ⁠peace deal.

Capping oil price gains, Iran and the U.S. agreed to halt recent hostilities in the Gulf and renew talks regarding their dispute over the Strait of Hormuz, a U.S. official said on Sunday.

"The market is likely to re-evaluate its assumption of a quick recovery of ​oil supply from the ​Persian Gulf," ANZ ⁠analysts said in a note.

Saudi oil giant Aramco resumed crude oil loadings on Friday at its Ras Tanura terminal, west of the Strait of ​Hormuz, after they were halted for nearly four months, as oil ​producers ramped ⁠up output and exports ahead of an interim deal.

Loadings continued even after a helicopter belonging to the company crashed on Sunday at Ras Tanura, killing 14 nationals. The cause of the crash ⁠was unknown.

"Physical ​flows are constrained by tanker backlogs, damaged infrastructure and ​production shut-ins. It could take the remainder of the year before supply is near pre-conflict levels," ANZ analysts said.