APA Corporation’s Forties Alpha oil platform in the North Sea.
Provided by: APA Co., Ltd.
Oil prices rose on Monday after US President Donald Trump threatened new military action against Iran, raising concerns about the durability of a fragile interim peace agreement reached last week.
President Trump also made the threat Sunday as Vice President J.D. Vance met with Iranian officials in Switzerland for the first round of talks under the interim agreement. The meeting was overshadowed by Iran’s announcement that it had once again closed off the Strait of Hormuz, a key route for global oil shipments.
International benchmark Brent crude oil futures for August contract rose 1.23% to $81.56 per barrel. U.S. West Texas Intermediate futures for July contract rose 3.04% to $78.93 per barrel.
The talks in the Swiss resort of Burgenstock were the first since Washington and Tehran last week signed a memorandum of understanding ending the conflict and extending a fragile ceasefire for at least 60 days.
The agreement called for the reopening of the Strait of Hormuz and a cessation of hostilities throughout the region, including Lebanon. But Iran has accused the United States of failing to secure a ceasefire in Iran and said the talks would focus only on implementing the memorandum, rather than broader issues such as its nuclear program.
Quantum Strategy’s David Roche said oil supplies in the Middle East are now close to pre-war levels, including crude in storage and tankers. But he warned in a report on Monday that the apparent richness reflected a liquidation of inventories rather than a recovery in production, and that once inventories were depleted, the market would be vulnerable.
While oil prices rise on renewed tensions in the Middle East, Goldman Sachs said continued supply shocks could ultimately accelerate the transition to electric vehicles, reduce long-term oil demand and increase downside risks for oil prices.
