Oil rises on US-Iran strikes; gains capped by shipping hopes

LONDON: Oil rose almost 1% on Monday after attacks by the U.S. and Iran underscored the fragility of their interim peace deal while expectations of a continued recovery in energy shipping through the Strait of Hormuz limited gains.

Iran and the U.S. agreed to renew talks over the strait, raising hopes of saving the peace deal that had been threatened by days of tit-for-tat strikes.

Brent crude futures were up 62 cents, or 0.9%, at $72.61 a barrel by 1203 GMT. U.S. West Texas Intermediate crude gained 53 cents, or 0.8%, to $69.76.

“A war premium could remain present until the situation in the Middle East calms down completely, generating fewer headlines,” said Achilleas Georgolopoulos, analyst at broker XM.

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

“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.” Middle East producers are pushing ahead with loading oil and LNG despite fresh ship attacks in the Strait of Hormuz and renewed strikes between the U.S. and Iran in recent days, shipping data showed.

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.

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.