Oil prices gained more than one per cent on Monday after attacks by the US and Iran underscored the fragility of their interim peace deal, while cautious hopes of a continued recovery in energy shipping through the Strait of Hormuz limited gains.
Iranian and US technical teams working on the implementation of an interim peace deal are expected to meet in Doha in the coming days, a source told Reuters on Monday, after the tit-for-tat weekend strikes threatened to derail the accord.
Brent crude futures were up 90 cents, or 1.25 per cent, at $72.89 a barrel by 11:36 EDT (15:37 GMT). US West Texas Intermediate crude gained $1.20, or 1.73 per cent, to $70.43.
Brent crude fell 10.6 per cent last week in a third consecutive weekly decline after crude shipments through the strait rose to their highest since the US-Israeli war on Iran began in late February.
Outbound Persian Gulf crude exports are quickly rebounding to at least 75 per cent of pre-war levels, Gelber Associates analysts said in a note on Monday.
However, analysts cautioned that traffic through the strait is far from being fully recovered, helping keep prices somewhat elevated.
"I think that reality is starting to sink in, not every barrel is going to come out the gulf in the next week or two, you can't really jam as many barrels through there as possible to pre-war levels. As long as the situation is risky, anyone owning a boat runs the risk of having that boat attacked as it heads through the strait," said Bob Yawger, director of energy futures at Mizuho.
Mines in the waterway as well as insurance companies not yet being fully on board are also factors weighing on traffic through the strait, according to Yawger.
Meanwhile, 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 US 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.
(Reporting by Georgina McCartney in Houston, Alex Lawler; Additional reporting by Florence Tan and Sudarshan Varadhan; Editing by David Goodman, Jan Harvey and Nick Zieminski)
