Oil prices edged higher on Monday as traders assessed the state of an uneasy cease-fire in the Persian Gulf. An American official said the United States and Iran had agreed to halt attacks in the Strait of Hormuz, raising hopes that the hostilities of recent days may not escalate into a full resumption of war.
A U.S. official, who spoke on the condition of anonymity to discuss ongoing negotiations, said the United States and Iran had agreed to allow commercial vessels to transit the strategic waterway while continuing talks on the existing memorandum of understanding. Iran has yet to confirm the latest agreement.
The cease-fire had appeared to be unraveling after an Iranian drone strike on a cargo ship on Thursday. The United States responded a day later by targeting Iranian air-defense sites and other military infrastructure. In turn, Iran’s Revolutionary Guards said they had launched missiles and drones this weekend at a U.S. naval base in Bahrain and an air base in Kuwait.
The number of ships navigating the strait dropped steadily through the weekend.
