By Anushree Mukherjee
Aug 17 (Reuters) – Oil prices were mixed on Monday amid a lack of progress in diplomatic efforts to resolve Middle East tensions, though the absence of major supply outages limited gains.
Brent crude futures were up 27 cents or 0.31% at $88.79 by 0806 GMT after hitting a session high of $89.40. U.S. West Texas Intermediate crude futures fell 24 cents or 0.29% to $82.16 a barrel.
Both contracts gained more than 5% last week following attacks on tankers operated by Abu Dhabi National Oil Company in the Hormuz strait and on a Saudi Aramco refinery.
But Bjarne Schieldrop at SEB Research said that were prices were unlikely to move substantively higher unless there was a halt in the current flow of crude out through the Strait of Hormuz at night and/or a closure of the Bab el-Mandeb Strait.
For now, prices were trading close to $90 as traders weigh 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, Schieldrop said.
Over the weekend, Iranian Foreign Minister Abbas Araqchi said Iran had not decided to resume talks with the U.S. while U.S. President Donald Trump urged Americans to accept slightly higher gasoline prices while the conflict continues.
Iran’s Foreign Ministry spokesperson Esmaeil Baghaei said talks with Oman were continuing and were taking a long time due to the complexity of the subject, the involvement of multiple actors and countries seeking to undermine the process.
Priyanka Sachdeva, head of market insights for Phillip Nova in Singapore, also said she saw limited upside, “unless we get clear evidence of renewed aggression in the Strait of Hormuz, particularly material damage to tankers or oil infrastructure.”
Shipping through the Strait of Hormuz slowed over the weekend, data showed on Monday, following attacks on tankers. Five commodity vessels transited the strait on Saturday, with none registered for Sunday, ship-tracking data from Kpler showed, versus 31 for the prior weekend.
“Gulf exports picked up slightly despite ongoing attacks, while more ships reportedly transited the Strait of Hormuz without transponders,” ANZ said in a note.
Before U.S.-Israeli attacks on Iran began in late February, the strait handled about one-fifth of global oil and liquefied natural gas supplies.
Meanwhile, the United Arab Emirates accused Iran of attacking a third vessel operated by ADNOC that was transiting the strait on Friday, the Emirati state news agency WAM reported, after blaming it for two other incidents involving ADNOC vessels in the strait on Thursday evening.
(Reporting by Anushree Mukherjee in Bengaluru; Additional reporting by Florence Tan and Sethuraman NR; Editing by Sonali Paul and Edwina Gibbs)
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