Oil Prices Stagnate Amid Middle East Tensions and Supply Uncertainty

Oil prices were mixed on Monday as diplomatic efforts to resolve Middle East tensions remained stalled. Brent crude futures rose by 27 cents or 0.31% to $88.79, while U.S. West Texas Intermediate crude futures fell by 24 cents or 0.29% to $82.16 a barrel.

The recent attacks on tankers operated by Abu Dhabi National Oil Company in the Hormuz strait and on a Saudi Aramco refinery had driven oil prices up more than 5% last week, but analysts say that unless there is a halt in crude flow through the Strait of Hormuz at night or a closure of the Bab el-Mandeb Strait, prices are unlikely to move substantially higher.

Bjarne Schieldrop from SEB Research said that prices were trading close to $90 as traders weighed the risk of deeper disruption and shortages against the possibility of a resolution where the Strait of Hormuz is reopened and oil prices fall sharply.