Oil prices experienced an uptick on Monday as shipping activity through the Strait of Hormuz faced delays, coinciding with the initial discussions between U.S. and Iranian officials under an interim peace agreement, which encountered some difficulties. Brent crude futures increased by 54 cents, or 0.67%, reaching $81.11 a barrel by 0030, following a peak of $82.30 at the beginning of trading. U.S. West Texas Intermediate crude futures stood at $78.62 a barrel, reflecting an increase of $2.02, or 2.64%, in anticipation of the contract’s expiry later on Monday. The more active August contract increased by $1.43, reaching $77.28 per barrel. There was no settlement in the U.S. market on Friday as a result of a holiday.

The number of ships that passed the Strait of Hormuz experienced a significant decline on Sunday following Iran’s announcement of the closure of the waterway. This decision was attributed to alleged violations of the interim peace deal by Israeli and U.S. entities, as indicated by shipping data. “The market’s expectation of the opening of the Strait has been premature,” Saul Kavonic stated. “Iran ⁠is likely to ‌continue to find pretexts to stymie flows through the Strait, as that remains their only point of leverage into the mid-terms which they are unlikely to let ⁠go of.” U.S. President Donald Trump issued a warning regarding the potential resumption of military actions against Iran, coinciding with U.S. Vice President JD Vance’s meeting with Iranian officials on Sunday.

This marked the inaugural discussions under an interim peace agreement. Meanwhile, Tehran asserted that the U.S. had not fulfilled its obligation to cease hostilities in Lebanon. Israeli strikes in Lebanon resulted in the deaths of at least 20 individuals on Saturday, according to Lebanon’s state news agency NNA. This occurred just one day after a ceasefire with Hezbollah was implemented, intended to curb months of escalating violence. “The situation in Lebanon continues to pose a serious ongoing threat to both the ceasefire and the reopening of the Strait,” market analyst Tony Sycamore.

Oil prices experienced a decline exceeding 8% last week, driven by anticipations of increased supply from the release of cargoes previously stranded in the Gulf, alongside the possible easing of U.S. sanctions on Iranian oil as part of the ongoing U.S.-Iran negotiations. Since Monday, more than 25 million barrels of Iranian oil have traversed the virtual blockade line, as reported. The United Arab Emirates, Kuwait, and Iraq have increased their oil offerings to customers over the past week. Iraq intends to incrementally increase crude oil production to a range of 4.2 million to 4.3 million barrels per day, as stated by the country’s deputy oil minister for upstream affairs on Sunday.