By Our Correspondent
Global crude oil prices fell on Monday, with Brent crude declining by 1.9 per cent to $96.49 per barrel, as renewed hopes of a diplomatic agreement between the United States and Iran eased fears of further military escalation in the Middle East.
The decline followed indications that Washington could halt further military action against Tehran if both countries reached an agreement on Iran’s nuclear programme and access to the strategically important Strait of Hormuz.
However, persistent security threats around the vital shipping corridor continue to fuel concerns over possible disruptions to global oil supplies, limiting the likelihood of a sustained decline in crude prices.
Brent crude futures for January delivery dropped to $96.49 per barrel from $98.32 at the previous close. Similarly, US benchmark West Texas Intermediate (WTI) crude futures for December delivery fell by 1.2 per cent to $89.75 per barrel, compared with $90.83 previously.
The market reaction followed comments by US President Donald Trump suggesting that further American military strikes against Iran could be avoided if Tehran agreed to a comprehensive deal covering its nuclear programme and access through the Strait of Hormuz.
Speaking to CNN, Trump said the possibility of renewed military action would depend on Iran’s willingness to reach an agreement, while insisting that Washington remained prepared to resume attacks if necessary.
He also maintained that previous military operations had significantly weakened Iran’s military capabilities, adding that American forces were prepared to launch further strikes if the situation warranted.
Despite the diplomatic signals, developments around the Gulf have continued to highlight the vulnerability of global energy supplies to the conflict.
Overnight US strikes on Iran’s Qeshm Island reportedly caused no damage to residential or commercial properties or critical infrastructure, according to Ahmad Nafisi, deputy governor of the southern Hormozgan province.
Nafisi, quoted by the semi-official Fars news agency on Monday, said the situation on the island, located near the entrance to the Strait of Hormuz, remained under control.
He added that emergency services and public utilities had been placed on high alert, while the locations targeted were outside residential and commercial areas. Essential services and critical infrastructure were also said to have remained unaffected.
Meanwhile, concerns over maritime security intensified after Iran’s Islamic Revolutionary Guard Corps (IRGC) Navy reported that two oil tankers caught fire after striking naval mines in or around the Strait of Hormuz.
The IRGC accused the vessels of disabling their navigation and positioning systems and attempting to use an unauthorised shipping route. It said one tanker was struck east of the strait, while the other was hit within the waterway.
In a separate development, the United States Central Command (CENTCOM) announced that an American aircraft had disabled a cargo vessel in the Gulf of Oman after repeated attempts to breach the US naval blockade of Iran.
The military command identified the vessel as the St Kitts-flagged Huda, which it said had previously called at an Iranian port.
The incidents have heightened uncertainty in the international oil market, as investors weigh the prospects of diplomatic progress against the continuing risks of military confrontation and disruptions to maritime transportation.
For oil-importing countries such as Nigeria, a sustained decline in international crude prices could help ease imported energy costs and potentially moderate domestic fuel prices.
However, the extent of any relief would depend on movements in refined petroleum product prices, exchange-rate fluctuations and prevailing domestic supply conditions.
The Strait of Hormuz remains a major concern for global energy markets, given its strategic importance to international oil shipments. Any prolonged disruption to shipping through the corridor could trigger another sharp increase in crude prices.
Monday’s decline therefore reflects improved market optimism over a possible diplomatic resolution between Washington and Tehran rather than a complete removal of the geopolitical and supply-side risks confronting the global oil industry.
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