- Oil prices gained after US, Iran agreed temporary truce.
- US and Iran paused hostilities for Tuesday’s Qatar talks.
- Recent military actions raised concerns for global oil supplies.
Oil prices gained on Monday after reports indicated that the United States and Iran had agreed to temporarily halt attacks on each other ahead of a fresh round of technical talks expected to take place in Qatar on Tuesday.
According to Reuters, Brent crude futures rose 52 cents, or 0.72 per cent, to $72.51 a barrel by 2313 GMT. US West Texas Intermediate (WTI) crude climbed 71 cents, or 1.03 per cent, to $69.94 a barrel.
The gains came as the latest developments highlighted the fragile nature of the interim memorandum of understanding (MoU) reached earlier this month, following renewed military action in and around the Strait of Hormuz.
Reports Point To Temporary Standstill
Multiple media reports suggested that Washington and Tehran had agreed to suspend hostilities for the time being while allowing commercial vessels to pass safely through the Strait of Hormuz.
According to Axios, senior US officials said both sides had decided to stop military operations ahead of the planned technical discussions. The report said the meeting, initially expected to take place in Switzerland, is now likely to be held in Doha, Qatar, on Tuesday.
One US official told Axios, “We decided to stop all the kinetic activity.”
Another official said both countries would “stand down” for now and that vessels would be able to move freely while technical discussions on the MoU continue.
The Hill also cited an unidentified US official as saying that both sides had agreed to pause attacks.
“Technical talks are slated to continue on all areas of the MOU. Both sides will stand down for now and vessels can move freely,” the official said.
Axios reported that officials from both countries and another source confirmed the meeting was scheduled for Tuesday. The report also said Nick Stewart, who leads the US technical team, is expected to attend the discussions.
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Renewed Military Action Raises Supply Concerns
The latest reports follow several days of renewed military exchanges that fuelled concerns over oil supplies passing through the Strait of Hormuz, one of the world’s most important energy shipping routes.
US Central Command (Centcom) said on Sunday that American fighter aircraft struck 10 Iranian targets in and around the Strait of Hormuz. US officials said the strikes were carried out after a drone attack targeted the Panamanian-flagged tanker M/T Kiku, which was transporting more than two million barrels of crude oil through the waterway.
The renewed hostilities revived concerns over potential disruptions to global energy supplies, with around one-fifth of the world’s oil and liquefied natural gas shipments passing through the Strait.
Last week, Brent crude declined 10.6 per cent, marking its third consecutive weekly fall. Despite ongoing diplomatic efforts, shipping activity through the Strait slowed following the latest exchanges. On Friday, Brent crude settled at around $72 a barrel, while US crude closed near $69, their lowest levels since the conflict began, reported The Financial Express.
Fresh Accusations Despite Diplomatic Efforts
The renewed military action followed fresh accusations from both sides over alleged violations of the interim agreement.
Iran had earlier stated that safe passage through the Strait of Hormuz would only be guaranteed for ships coordinating with its government. Meanwhile, US President Donald Trump accused Iran of carrying out a drone attack on a commercial vessel near Oman.
Following the US strikes, Trump wrote on Truth Social that American aircraft had targeted Iranian missile and drone storage facilities as well as coastal radar sites.
“United States aircraft just struck Iranian missile and drone storage locations, and coastal radar sites, for violating the Cease Fire Agreement, AGAIN!” he posted.
He added, “It is very possible that they will never learn! There may come a point when we are no longer able to be reasonable, and will be forced to militarily complete the job that we very successfully started. If that happens, the Islamic Republic of Iran will no longer exist!”
According to reports from Iranian Foreign Minister Abbas Araghchi’s Telegram channel, he met senior Iraqi officials in Baghdad on Sunday and accused the US and Israel of violating parts of the recently signed memorandum. Kuwait and Bahrain also reported overnight drone attacks.
Earlier reports had suggested that negotiations between Washington and Tehran had been put on hold. However, Trump administration officials denied those claims.
An unidentified US official told CNBC that the negotiations remained on schedule.
“Nothing has been cancelled. Technical talks regarding the implementation of [memorandum of understanding] are on track for the coming days as planned,” the official said.
Another official reiterated that “technical talks are slated to continue on all areas of the MOU.”
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