Oil prices moved higher after Iran carried out naval drills near a key global shipping route ahead of talks with the United States. The development has increased tensions and created fresh uncertainty in global energy markets.
Iran Conducts Naval Drill
Iran’s Revolutionary Guard held naval exercises near the Strait of Hormuz, according to reports by Tasnim News Agency. The Strait of Hormuz is one of the world’s most important sea routes. Nearly one-fifth of the world’s oil supply passes through this narrow waterway.
Any military activity in this area often raises concerns about possible supply disruptions, which can push oil prices higher.
Oil Prices React
West Texas Intermediate (WTI) crude traded near USD 64 per barrel. There was no official settlement price on Monday due to a US public holiday. Brent crude closed below USD 69 per barrel.
Trading volumes remained low. Markets in the US and Canada were closed for holidays, and several Asian markets were also operating with reduced activity due to Lunar New Year celebrations. As a result, Brent trading fell to one of its lowest levels this year.
US-Iran Talks in Focus
The naval drills come ahead of indirect talks between Iran and the United States. Iran’s Foreign Minister Abbas Araghchi spoke with the head of the International Atomic Energy Agency before the upcoming discussions. He also reviewed proposals that may be presented in indirect talks with US special envoy Steve Witkoff.
US Secretary of State Marco Rubio said he hopes both countries can reduce long-standing tensions and reach some form of agreement.
Russia-Ukraine Talks and Oil Supply
Separately, talks between Russia and Ukraine are scheduled in Geneva. However, experts say a quick end to the nearly four-year conflict is unlikely. This means the possibility of a full return of Russian oil supply to global markets remains uncertain.
Overall, rising geopolitical tensions in the Middle East and Eastern Europe continue to influence oil prices and global energy markets.
