Oil Prices Mixed as Middle East Tensions Weigh on Markets

Oil prices were mixed on Monday due to ongoing tensions in the Middle East and the uncertainty surrounding the flow of crude through the Strait of Hormuz. Brent crude futures rose by 27 cents or 0.31% to $88.79, while US West Texas Intermediate crude futures fell by 24 cents or 0.29% to $82.16 a barrel.

The prices had surged last week following attacks on tankers operated by Abu Dhabi National Oil Company in the Hormuz strait and on a Saudi Aramco refinery. However, according to Bjarne Schieldrop at SEB Research, oil prices are unlikely to move substantially higher unless there is a halt in the current flow of crude through the Strait of Hormuz or a closure of the Bab El Mandeb Strait.

Priyanka Sachdeva, head of market insights for Phillip Nova in Singapore, also expressed limited upside, stating that 'unless we get clear evidence of renewed aggression in the Strait of Hormuz, particularly material damage to tankers or oil infrastructure', prices are unlikely to rise further.