Oil rises as U.S. and Iran agree to pause hostilities, allow Strait of Hormuz transit

According to CNBC, oil prices rose Monday after the U.S. and Iran agreed to halt recent hostilities in the Middle East and allow commercial vessels to freely transit the Strait of Hormuz. U.S. West Texas Intermediate futures gained 1.9% to $70.56 a barrel, while Brent crude rose 1.3% to $72.91. A U.S. official said technical talks would continue on areas of the memorandum of understanding reached June 17 and that both sides would stand down for now. U.S. Central Command said fighter jets struck 10 Iranian military targets in and near the Strait of Hormuz in retaliation for a drone strike on the Panamanian-flagged tanker M/T Kiku, which it said was carrying more than 2 million barrels of crude oil. ING strategists Warren Patterson and Ewa Manthey said market participants appeared too optimistic about the timeline for a recovery in Persian Gulf oil supplies and warned of upside risk if supply recovery is slow or if tensions re-escalate.