Oil rises as U.S.–Iran tensions ease

Oil prices moved higher on Monday as tensions between the United States and Iran showed signs of easing after recent clashes in the Middle East. U.S. West Texas Intermediate (WTI) futures (USOIL) rose 2.4% to $70.85 per barrel, while international benchmark Brent crude futures (UKOIL) gained 1.7% to $73.20. The price gains followed a period of hostilities that had raised concerns about supply risks and disrupted negotiations aimed at ending the conflict.

The latest increase comes after the WTI contract (USOIL) had settled below $70 per barrel on Friday for the first time since February 27, the day before the start of the Iran war. Monday’s rebound reflects shifting expectations as market participants reassess the likelihood of prolonged disruption to oil flows from the region.

Officials said the United States and Iran agreed to pause recent hostilities and to allow commercial vessels to transit freely through the Strait of Hormuz. The Strait is a strategically important maritime chokepoint for global crude shipments, and any perceived threat to transit has the potential to affect oil supply and prices.

By committing to safeguard commercial traffic, both sides reduced immediate concerns about interruptions to seaborne crude flows. This easing of risk contributed to the upward move in both WTI and Brent futures (UKOIL), as traders responded to signs that shipping conditions in the Gulf may stabilize in the near term.

Alongside the pause in hostilities, technical discussions related to a memorandum of understanding between the United States and Iran are slated to continue. Officials indicated that talks would cover multiple areas of the understanding, with the aim of supporting a broader de-escalation process.

The continuation of these technical talks is a key element for energy markets, as it signals that diplomatic channels remain open despite recent clashes. Progress on the memorandum and the maintenance of secure transit through the Strait of Hormuz are central to market confidence about uninterrupted oil supply from the region.

The recent price action illustrates how sensitive oil markets remain to geopolitical events in the Middle East. The combination of earlier clashes, the subsequent agreement to pause hostilities, and assurances on commercial shipping all fed quickly into futures pricing for both WTI and Brent.

While the latest developments eased some immediate concerns, traders continue to monitor the situation closely for any signs of renewed tension that could affect negotiations or transit conditions. For now, the agreement to allow free passage of commercial vessels and the resumption of technical talks have provided support to crude prices and reduced near-term downside risk tied to supply disruptions.