Oil Prices Stall as US-Iran Talks Halt, Geopolitical Risk Returns

Oil prices struggled to find direction on Monday as US-Iran talks stalled, reviving concerns over prolonged Middle East tensions. Despite early gains of up to 1% in Brent crude futures, which rose to $89.40 per barrel, they ultimately fell back by 24 cents to $89.28 by 0620 GMT. Meanwhile, US West Texas Intermediate crude futures lost 67 cents to $81.74 a barrel.

Analysts pointed out that oil prices have now rebounded almost completely from their lows in early August as hopes for a more permanent resolution between the US and Iran faded, leading to renewed geopolitical risk premiums in the market.

Priyanka Sachdeva, head of market insights for Phillip Nova in Singapore, noted that unless there's clear evidence of renewed aggression in the Strait of Hormuz, particularly material damage to tankers or oil infrastructure, there will be limited upside from current prices.