Global Oil Prices Ease After Month High Amid Iran Diplomacy

LONDON: (News Desk) – Global oil prices pared earlier gains on Monday after climbing to their highest level in a month, as Iran signaled that diplomatic communication with the United States remains active despite renewed military tensions in the Middle East.

Crude prices have surged over the past week as exchanges between Washington and Tehran heightened concerns over possible disruptions in the Strait of Hormuz, a key shipping route that handles nearly one-fifth of the world’s seaborne oil trade.

Both Brent crude and West Texas Intermediate (WTI) extended last week’s rally before easing later in the session. Brent briefly crossed $91 per barrel, its highest level since June, before settling around $89, while WTI traded near $83 per barrel.

The market reaction came after Iranian Foreign Ministry spokesman Esmaeil Baghaei confirmed that diplomatic contacts with the United States were continuing through mediators despite ongoing regional hostilities.

He said mediators had exchanged messages with Tehran in recent days, indicating that diplomatic channels remain open even as military operations continue.

The rise in crude prices has revived concerns that higher energy costs could keep inflation elevated and complicate efforts by central banks to reduce interest rates.

However, some analysts believe the broader economic environment remains supportive, pointing to easing inflation and a softer labor market in the United States.

They warned that the greatest economic risk would emerge if elevated oil prices persist for an extended period, reducing consumer spending and slowing global growth.

Asian stock markets delivered mixed performances. Chinese markets advanced on expectations of further economic stimulus from Beijing, with Hong Kong’s Hang Seng Index gaining more than two percent and Shanghai also closing higher.

Meanwhile, most other regional markets, including Seoul, Taipei, Sydney, Mumbai, Bangkok, Singapore and Kuala Lumpur, ended the day lower as investors remained cautious over geopolitical developments.

European markets were also mixed, with London slipping while Paris and Frankfurt posted modest gains.

On Wall Street, all three major US indexes had closed lower on Friday as investors reduced exposure to technology stocks while monitoring developments in the Gulf region.

Gold prices edged slightly lower despite geopolitical uncertainty, while silver posted modest gains.