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Brent Edges Higher as Fragile US-Iran Truce Keeps Hormuz Risks Elevated, TPH Says

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Brent crude rose less than 1% on Monday after media reports said the US and Iran had agreed to halt hostilities and resume talks later this week, although the outlook for negotiations dimmed after Tehran said no direct discussions with Washington were planned, TPH Energy Research analyst Matt Portillo said in a note on Monday.

The muted price reaction came despite continued military exchanges between the two countries over the weekend and mounting concerns over shipping through the Strait of Hormuz.

Tensions escalated on Wednesday after commercial vessels began transiting an International Maritime Organization-backed shipping corridor that bypassed Iranian oversight. Iran warned it could not guarantee the safety of ships using the route.

The situation worsened on Thursday when the Ever Lovely container ship, operating outside the IMO framework, was struck, prompting the IMO to suspend the corridor. Drone attacks on Friday led to US military strikes, with both sides launching retaliatory attacks through the weekend while accusing each other of violating a memorandum of understanding intended to ease tensions.

Iran maintains the agreement granted Iran and Oman oversight of the Strait of Hormuz and has warned that further US strikes would trigger stronger retaliation and end any diplomatic efforts.

Shipping traffic through the strategic waterway fell by more than half over the weekend compared with Wednesday, highlighting growing disruption. Additional uncertainty emerged after Hezbollah rejected a proposed Israel-Lebanon framework calling for an Israeli withdrawal tied to the group's verified disarmament.

With the ceasefire appearing increasingly fragile, further gains in oil prices remain possible absent a meaningful diplomatic breakthrough.

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