Oil prices climbed on Monday after renewed military exchanges between the United States and Iran heightened uncertainty over commercial shipping through the Strait of Hormuz, overshadowing reports that both sides had agreed to temporarily halt attacks and resume negotiations.
Brent crude, the international benchmark, rose about 0.9 percent to $73.21 per barrel by 03:30 GMT, while US West Texas Intermediate crude gained to $70.11 a barrel.
The rebound followed a sharp decline last week, when improving shipping activity and optimism surrounding a ceasefire had pushed prices lower.
The latest gains came after several days of tit-for-tat strikes between Washington and Tehran disrupted confidence in the security of the Strait of Hormuz, a vital maritime route for global energy trade.
US Central Command announced strikes against Iran on Friday and Saturday, saying they were carried out in response to Iranian attacks on two commercial vessels in the waterway.
Iran subsequently launched missiles and drones targeting US military assets in Bahrain and Kuwait.
Market participants also reacted to Thursday's attack on a commercial vessel, which added to concerns that normal shipping conditions had yet to be restored.
Fabien Yip of IG said, "Brent’s partial rebound this morning reflects a market that had perhaps run too quickly on ceasefire optimism."
Reports late on Sunday indicated that Washington and Tehran had agreed to suspend attacks temporarily and resume technical negotiations under the memorandum of understanding aimed at ending the conflict.
Multiple media outlets also reported that commercial shipping would be allowed to move freely through the Strait of Hormuz, while Axios reported planned talks in Doha, Qatar, on Tuesday.
Iran has not commented on the reported agreement or the proposed negotiations.
Asian equity markets delivered mixed performances, with declines in Tokyo and Seoul offset by gains in Hong Kong and Taipei.
Technology shares linked to the artificial intelligence sector recorded some of the sharpest losses, while investors also weighed quarter-end profit-taking alongside continued uncertainty over geopolitical developments and energy markets.