Oil prices push higher after US and Iran trade blows

(Sharecast News) - Oil prices pushed higher on Monday after Iran and the US continued to trade blows, dampening hopes for an imminent peace deal.

Washington and Tehran agreed a ceasefire in April following weeks of fighting, which has effectively closed the vital Strait of Hormuz and sent global energy prices soaring. The pause in hostilities has since been extended, with Pakistan acting as a mediator between the two countries.

However, a permanent peace deal remains elusive, with both sides seemingly unable to compromise on terms and blows continuing to be exchanged.

Early on Monday, US Central Command said it had hit radar and drone control sites over the weekend. It said the attacks had been carried out in self-defence in response to "aggressive Iranian actions", including a US drone being shot down over international waters.

The Islamic Revolutionary Guard Corps, meanwhile, said it had targeted an airbase America was using for attacks on southern Iran, although the site was not named.

US president Donald Trump repeated once again on Monday that Iran "really wants to make a deal" and insisted it will be "a good one" for the US. He also criticised Democrats and some Republicans, arguing that they were making it "MUCH tougher" for him to negotiate while "political hacks keep negatively 'chirping'".

He concluded: "Just sit back and relax, it will all work out well in the end - It always does!"

Markets, however, remained unconvinced by his latest claims. As at noon BST, benchmark Brent crude was trading 3% higher at $93.98 a barrel, while West Texas Intermediate was up 3% at $90.57.

Dan Coatsworth, head of markets at AJ Bell, said: "It's Groundhog Day for the markets as the Iran-US ceasefire is tested, while conflicting noises are made about the prospects for a peace deal.

"Understandably, markets are in a non-committal mood as they wait to see if this is the week when we finally see some form of resolution to the crisis. Oil prices ticked higher, but remain some way off the $100 per barrel alarm-bell territory."