Oil Prices Return to Month-Ago Levels

Oil prices at the beginning of the week returned to levels around $90 per barrel, last recorded in the first half of June. On Monday, benchmark North Sea Brent crude briefly exceeded $91 per barrel, then fell to about $88 as signs of renewed diplomatic contacts between the United States and Iran somewhat alleviated concerns about global oil supplies.

Iran's Foreign Ministry reported receiving proposals from international mediators aimed at reducing tensions. The ministry indicated that talks with the US could continue if they serve the country's national interests.

Oil prices remain highly volatile as markets react to changing prospects of escalation or de-escalation of the Middle East conflict, which has repeatedly disrupted shipping through the Strait of Hormuz. Early in Monday's trading session, prices spiked after another exchange of strikes between the US and Iran, including attacks on vessels attempting to transit the strait and a strike on an oil facility in Kuwait over the weekend. Despite the correction, geopolitical risks continue to add a significant premium to oil prices. The lowest prices in recent months were recorded in early July, when they fell below $70 per barrel.