Crude oil prices climbed to $107 per barrel on Monday before easing to around $105 as fresh diplomatic efforts emerged to end the conflict between the United States and Iran.
The price increase came as Qatar prepared to facilitate another round of discussions between Washington and Tehran, raising hopes that an agreement could eventually restore oil shipments through the Strait of Hormuz.
According to Reuters, Qatari mediators were expected to meet Iranian Foreign Minister Abbas Araqchi in New York, while separate discussions with US representatives were also expected on Monday or Tuesday.
The talks are expected to focus on an amended version of a seven-day proposal put forward by Iran during the United Nations General Assembly.
Under the proposal, Iran is seeking an end to the conflict in Iran and Lebanon, the release of billions of dollars in frozen Iranian assets, the removal of sanctions on its oil exports and the lifting of the US blockade on Iranian ports.
In return, Tehran would allow the Strait of Hormuz to reopen and resume negotiations with Washington over its nuclear programme.
The Strait of Hormuz is a major route for global oil shipments, making any disruption to the waterway a significant concern for energy markets. The ongoing restrictions on shipments have contributed to higher crude prices and increased supply concerns.
US President Donald Trump initially rejected Iran’s proposal, saying Tehran was seeking a quick agreement because of the economic pressure it was facing.
However, Trump later said US negotiators could hold further talks with Tehran during the week, leaving room for renewed diplomatic engagement.
Iran has also said it is willing to negotiate an end to the conflict but would not accept an agreement reached through coercion.
The conflict began on February 28 following US and Israeli strikes on Iran and has since disrupted oil movements through the Strait of Hormuz.
For oil-producing countries such as Nigeria, sustained high crude prices could support export earnings and government revenue, although the benefits would depend on domestic production levels and other market conditions.
The direction of crude prices will therefore continue to depend partly on developments around the Strait of Hormuz and whether the renewed US-Iran talks lead to an agreement that restores normal oil shipments.
