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Oil prices edged lower on Monday as markets weighed early signs of potential de-escalation in the Middle East against ongoing supply disruptions.
Reports of a possible agreement between the United States and Iran to halt hostilities and reopen the Strait of Hormuz have tempered supply concerns to a certain extent and pushed prices down.
At the same time, OPEC+’s decision to raise output quotas could favour a decline in oil prices when tensions recede and oil exports return to normal levels.
In parallel, a potential resumption of Iraqi exports could also weigh on the market if they materialise.
However, underlying conditions remain fragile. Vessel transit through the Strait remained limited. Looking ahead, oil prices are likely to remain highly sensitive to geopolitical developments in the Middle East. While any sustained progress toward a ceasefire could weigh on prices, the fragile security backdrop and ongoing disruptions suggest that any downside may be limited for now.
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