Oil prices were mixed on Monday, trading in a relatively narrow band as diplomatic efforts to secure a temporary ceasefire between the US and Iran limited further gains, while persistent geopolitical risks in the Middle East continued to underpin prices.
International benchmark Brent crude futures traded at $109.64 per barrel at 9.58 a.m. local time (0658 GMT), up around 0.5% from the previous close of $109.03.
US benchmark West Texas Intermediate (WTI) decreased about 0.04% to $111.49 per barrel, compared with $111.54 in the previous session.
Prices remain elevated amid heightened uncertainty over potential supply disruptions in the Gulf region, which handles a significant share of global oil flows, even as negotiations offer a possible pathway to de-escalation.
Talks involving the US, Iran and regional mediators have intensified in recent days, with officials exploring a potential 45-day ceasefire that could lay the groundwork for a more permanent resolution to the conflict, the Axios news site reported Sunday, citing American officials.
However, the likelihood of securing even a limited agreement within the next 48 hours remains low, underscoring the fragile nature of the diplomatic process.
The negotiations are widely viewed as a last opportunity to prevent a broader regional escalation, including potential strikes on Iranian civilian infrastructure and retaliatory attacks targeting oil and water facilities across Gulf countries - scenarios that could significantly disrupt energy supplies.
US President Donald Trump extended his initial 10-day deadline for Iran by 20 hours, setting a new cutoff at 8 p.m. ET Tuesday (12 a.m. GMT), signaling that Washington is allowing a narrow window for diplomacy while maintaining a firm stance.
"There’s a good chance, but if they don’t agree, I am blowing up everything over there," Trump said, warning of attacks on Iranian infrastructure if no deal is reached.
Iran has vowed to retaliate against Israel and Gulf states in the event of an attack, raising concerns that any escalation could quickly spread across key energy-producing and transit regions.
According to sources cited by Axios, a US-Israeli plan targeting Iran’s energy infrastructure is already prepared, although the deadline extension is intended to provide a final opportunity for diplomatic progress.
Mediation efforts led by Pakistan, Egypt and Türkiye, alongside direct exchanges between Trump's envoy Steve Witkoff and Iranian Foreign Minister Abbas Araghchi, continue to facilitate dialogue. Still, Tehran has yet to accept proposals put forward by Washington.
The possibility of a ceasefire is limiting the pace of further price increases by easing immediate supply disruption fears, while escalating rhetoric and credible threats to critical energy infrastructure are keeping risk premiums firmly embedded in oil prices.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr
