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EMEA Oil Update: Crude Gains Amid Fragile Middle East Ceasefire

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Oil prices gained on Monday after the US and Iran agreed to halt hostilities in the Middle East, but uncertainties around transit through the Strait of Hormuz resurfaced.

Front-month Murban crude futures gained by 3.3% to $68.70 per barrel, while Brent futures were up about 1% to $72.63/bbl.

Last week, both contracts logged their third straight week of losses as market sentiment remains highly sensitive to geopolitical friction in the Middle East.

"The US and Iran have again agreed to halt attacks, after several days of fighting that threatened the fragile ceasefire," SEB analysts said.

"Peace talks will resume in Doha during the week. However, the market is mainly focused on ships continuing to pass through the Strait of Hormuz, and Brent oil is trading around $72 per barrel," they added.

US Central Command said it launched airstrikes against Iranian military targets following an Iranian attack on a commercial vessel transiting the critical Strait of Hormuz choke point.

According to analysts at Saxo Bank, the fragile ceasefire has allowed maritime traffic to resume normal transit through the Strait of Hormuz.

"Early gains faded after the two sides agreed to halt attacks, allowing vessels to move freely ahead of peace talks set to resume later this week," the analysts said.

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