Brent crude futures climbed 0.8 percent to $72.57 a barrel in early Asian trading on Monday, while West Texas Intermediate rose 1.3 percent to $70.11, after a weekend of reciprocal US and Iranian strikes underscored the fragility of the interim peace deal and again slowed tanker traffic through the Strait of Hormuz. The gains later moderated, with Brent trading little changed at $72.20, following reports that both sides had agreed to halt kinetic activity and hold technical talks in Doha on Tuesday. The initial spike reflected a rapid repricing of supply risk after the worst military escalation since the 17 June memorandum of understanding, while the subsequent cooling signalled that markets remain sceptical of a full rupture.

The renewed disruption followed an Iranian projectile strike on a cargo vessel in the strait last week, which triggered US Central Command strikes on 10 Iranian targets and retaliatory Iranian missile and drone attacks on American assets in Bahrain and Kuwait. Shipping traffic, which had recovered to its highest level since the US-Israeli war on Iran began in late February, slowed again, with analysts at ANZ noting that physical flows remain constrained by tanker backlogs, damaged infrastructure and production shut-ins. Saudi Aramco resumed loadings at its Ras Tanura terminal on Friday after a nearly four-month halt, but the company said a helicopter crash at the facility on Sunday that killed 14 people did not interrupt operations.

Viewed from trading floors in Singapore and London, the oil market’s reaction revealed a deep ambivalence. ING analysts described the complacency of participants focusing on a continued recovery in flows as “odd” and warned of significant upside risk if the supply recovery proves slow. In Washington, officials signalled that both sides would stand down and allow vessels to move freely while technical discussions on the memorandum’s 14 points continue. Tehran, meanwhile, insisted on its right to control passage through the strait and accused Washington of violating the deal’s first clause by failing to ensure a ceasefire in Lebanon, where Israeli strikes persist.

Broader financial markets reflected the cross-currents. European stocks edged higher and US futures gained, with the STOXX 600 up 0.1 percent and S&P 500 futures climbing 0.7 percent, as the prospect of de-escalation eased fears of a supply-driven inflation shock. The dollar index held near a one-year high at 101.25, supported by expectations of at least one Federal Reserve rate increase this year, while gold fell 0.6 percent to $4,061 per ounce, on course for its largest quarterly drop since 2013. In Asia, the KOSPI fell nearly 2 percent as AI-related tech concerns lingered, though the Nikkei edged up 0.15 percent.

The next factual milestone is the scheduled technical meeting in Doha on Tuesday, where US and Iranian officials are expected to address the implementation of the interim accord, including the reopening of the Strait of Hormuz. Market attention will focus on whether the talks can stabilise shipping and reduce the risk premium embedded in crude prices, or whether the pattern of strikes and counter-strikes will persist, keeping supply assumptions in flux.