Oil & Gas

Oil prices fell more than US$4 a barrel on Monday after US President Donald Trump held off a fresh attack on Iran, as he sought a quick deal that would halt Tehran's nuclear ambitions and reopen the Strait of Hormuz. Brent crude futures fell US$4.65, or 5.29%, to US$83.28 by 0702 GMT while US West Texas Intermediate crude was at US$79.47 a barrel, down US$5.20, or 6.14%. Both contracts jumped more than 20% last month after fighting between the US and Iran resumed and attacks on several tankers around Oman heightened security concerns, deterring shippers from entering the Gulf to load oil.

Markets remain cautious despite the recent drop in oil prices, with analysts warning that optimism could quickly fade if negotiations between the United States and Iran break down. IG market analyst Tony Sycamore said investors are watching closely to see whether tensions escalate again, particularly if Iran continues to use its influence over the Strait of Hormuz or responds with attacks on U.S. military bases or oil tankers. Shipping activity remains under pressure, with tanker traffic through the Strait of Hormuz slowing after reports of vessel attacks, while two Saudi oil tankers successfully passed through the Bab el-Mandeb Strait. The United Kingdom Maritime Trade Operations has also reported three additional tanker attacks since Saturday, highlighting ongoing security risks in the region.

Meanwhile, Opec+ has approved a production quota increase of about 188,000 barrels per day from September, completing the group's gradual reversal of voluntary output cuts. However, the increase is unlikely to significantly boost global oil supplies, as export disruptions caused by conflicts in Iran, Ukraine, Russia and Kazakhstan have offset previous production hikes. As a result, the additional output has had little effect on the amount of oil reaching the market or on overall price movements.