Oil prices had settled below $70 a barrel on Friday for the first time since Feb. 27, 2026 - the eve of the conflict with Iran. On Monday, prices jumped back above that line. The reason: the U.S. and Iran agreed to halt recent hostilities.
The U.S. and Iran agreed to pause military attacks over the weekend. This came after renewed violence. U.S. fighter jets struck 10 Iranian military targets in and near the Strait of Hormuz.
A drone hit the M/T Kiku, a tanker flying the Panamanian flag, while it was moving through the strait carrying over 2 million barrels of crude oil. Iran's neighbors, Kuwait and Bahrain, reported incoming missiles and drones overnight.
On Sunday, a U.S. official informed CNBC that "Technical talks are slated to continue on all areas of the MOU" - the memorandum of understanding agreed to by the U.S. and Iran on June 17. Another official said: "Both sides will stand down for now and vessels can move freely." That news sent oil prices upward.
U.S. West Texas Intermediate futures rose 1.9% to $70.56 per barrel. International benchmark Brent crude futures climbed 1.3% to $72.91.
The Strait of Hormuz is a strategically vital waterway. Military tensions had threatened supply.
Drone attacks and missile launches disrupted shipping. President Donald Trump posted on Truth Social that U.S. aircraft "struck Iranian missile and drone storage locations and coastal radar sites", then added: "There may come a point when we are no longer able to be reasonable, and will be forced to militarily complete the job that we very successfully started. If that happens, the Islamic Republic of Iran will no longer exist!"
Despite the price jump, some analysts say the relief may not last. Warren Patterson and Ewa Manthey, strategists at ING, said participants appear to be "shrugging off these developments, instead focusing on what a continued recovery in oil flows would mean for the global balance." They called the market "complacent."
The strategists warned: "This complacency is odd and clearly leaves significant upside risk if the supply recovery proves slow - or if we see significant re-escalation." They pointed out that technically, the oil market is in oversold territory, yet downward momentum persists.
The two sides will hold more technical discussions covering all aspects of their June 17 memorandum. The key question is how fast Persian Gulf oil supplies actually recover. If the supply recovery is slow - or if conflict re-escalates - oil prices could spike again.
