Oil prices rose sharply in early Asian trading on Monday after a weekend of reciprocal US-Iran strikes, with Brent crude touching $73.39 a barrel, before paring gains on reports that both sides had agreed to suspend hostilities and hold technical negotiations in Doha. By late European morning, Brent was up 0.8% at $72.50 and West Texas Intermediate rose 1.3% to near $70, still close to their lowest levels since the conflict began in February.

The strikes—which included US attacks on Iranian targets around the Strait of Hormuz and Iranian missile and drone strikes on American bases in Kuwait and Bahrain—followed an Iranian projectile hitting a cargo vessel in the waterway. The escalation again slowed tanker traffic through the chokepoint, which handles roughly one-fifth of global oil and liquefied natural gas shipments. It underscored the fragility of the 14-point interim peace memorandum signed on 17 June, which had allowed a brief recovery in crude flows. Analysts in London noted that the market had been complacent about supply risks, and that any slow recovery would leave significant upside price risk.

The diplomatic halt, confirmed by a US official, capped oil’s gains. Both sides agreed to “stand down” and allow vessels to move freely while technical talks continue. However, analysts in Australia cautioned that physical supply remains constrained by tanker backlogs, damaged infrastructure and production shut-ins, and that a return to pre-conflict export levels could take until year-end. Saudi Aramco resumed crude loadings at its Ras Tanura terminal after a nearly four-month suspension, though a company helicopter crash there killed 14 people, with no reported impact on operations.

Equity markets were mixed: US futures rose on the diplomatic news, while Asian shares were subdued and European indices flat. The dollar held near one-year highs on expectations of further Federal Reserve rate increases, pressuring gold to its biggest quarterly drop since 2013. The next factual milestone is the technical meeting in Doha on Tuesday, where the two sides are expected to address the Strait of Hormuz dispute and the implementation of the interim accord.