Brent crude oil prices managed to maintain a value of around $70 per barrel despite the latest round of attacks that erupted between the United States and Iran over the last few days.
This bodes well for South Africa’s petrol price adjustments later this week, which are currently showing a significant over-recovery thanks to the lower oil price.
The two sides have agreed to stop attacking each other before peace talks resume this week over the Strait of Hormuz and other issues, paving the way to end days of tit-for-tat attacks that tested a fragile truce.
A US official who spoke on condition of anonymity said technical talks are scheduled to continue on all aspects of a memorandum of understanding reached this month, adding that both sides will stand down for now, and vessels can move freely.
The exchange of attacks began Thursday over the waterway through which a fifth of the world’s oil and gas once flowed, with the Islamic Republic striking a container ship.
This prompted Washington to hit Iran the following day. The US struck again overnight Saturday after Tehran attacked a vessel carrying Qatari oil. Both sides blamed the other for breaching the ceasefire.
The violence ratcheted up tensions in the wake of this month’s interim US-Iran peace deal and risks slowing progress toward restoring traffic through the vital strait to prewar levels.
Talks over the details of the interim agreement were expected to resume this week in Doha.
US equity-index futures climbed after reports that the US and Iran backed away from a fresh escalation.
In the latest barrage on Sunday, Iran’s Islamic Revolutionary Guard Corps said it launched missiles and drones at the Ali Al Salem Air Base in Kuwait and the 5th Fleet naval base in Salman Port, Bahrain.
Kuwait said it intercepted two missiles, and there was no material damage or injuries. Bahrain reported a residential building had been hit, but said there were no fatalities.
The US said on Saturday it struck Iranian military sites.
“There may come a point when we are no longer able to be reasonable and will be forced to militarily complete the job that we very successfully started,” President Donald Trump said Saturday in a post on Truth Social after the latest strikes on Iran.
The Joint Maritime Information Centre on Saturday raised the security threat in the Strait of Hormuz to “substantial” after a tanker was struck and published a warning area for potential mines spanning much of the usual transit route.
It also said the Omani route recommended by Western navies had been expanded to allow ships to transit in both directions simultaneously.
Several vessels were crossing early Sunday using both the designated Omani and Iranian routes.
Tehran has repeatedly targeted Gulf states that host American military bases and thousands of troops since the US and Israel launched the war on 28 February.
Separately, Israel said it destroyed Hezbollah’s underground infrastructure in southern Lebanon. It had agreed with Lebanon to a ceasefire, but Hezbollah, which the US has deemed a terror group and is Israel’s target in Lebanon, said the ceasefire was “void.”
Iran has made Israel’s war with the Iran-supported Hezbollah a part of the interim deal, even though Israel was not a party to the agreement.
The IRGC said on Sunday that based on an agreement now known as the Islamabad Memorandum of Understanding, “traffic control arrangements in the Strait of Hormuz are with Iran, and from now on, violating ships will be dealt with more strongly than before,” Press TV reported in a post on X.
The two sides continue to tussle over key provisions, including whether Iran will impose tolls or other costs on ships seeking to sail through Hormuz and a ceasefire between Israel and Lebanon.
Oman told European officials that vessels may ultimately have to be charged some fees, Bloomberg reported earlier.
Iranian Foreign Minister Abbas Araghchi visited neighbouring Iraq on Sunday and said he discussed the US accord with officials in Baghdad.
Iran is solely responsible for the restoration of Hormuz traffic and any interference risks escalation, he said in a televised press conference alongside his Iraqi counterpart.
Trump’s decision to attack demonstrates that he’s willing to use military force to maintain freedom of navigation in the strait.
Iran’s strikes, however, have shown it will seek to maintain control of the waterway, which has been largely shut since just after the war began.
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