Investing.com - Oil prices traded sharply higher on Monday as tensions mounted between the U.K. and Iran, increasing fears of a disruption to oil supplies coming out of the Persian Gulf.
New York-traded West Texas Intermediate crude futures rose 75 cents, or 1.4%, to $56.38 a barrel by 7:51 AM ET (11:51 GMT), although that was some way off an earlier high of $57.02, while Brent crude futures, the benchmark for oil prices outside the U.S., gained 80 cents, or 1.3%, to $63.27, having similarly retreated from a high of $64.02.
The retreat gathered pace after U.S. Secretary of State Mike Pompeo indicated that the U.S. wouldn't use Friday's seizure of the Stena Impero, a British-flagged tanker, to escalate the crisis further.
"The responsibility...falls to the United Kingdom to take care of their ships," Pompeo told Fox News.
U.K. Prime Minister Theresa May held an emergency meeting on Monday to discuss with British ministers the situation. It wasn't immediately clear what had been agreed.
The U.S. has accused Iran of being behind two other tanker attacks in the region since May and threatened on Friday to down any Iranian drones that fly too close to its ships.
Washington and Tehran have been at odds since U.S. President Donald Trump decided to withdraw from a nuclear accord with Iran and reinstate economic sanctions.
Investing.com senior commodity analyst Barani Krishnan said that it was in Trump’s best interest to work out a new deal, as it could add around 2 million barrels per day to world oil supply and reduce prices.
However, Krishnan noted that "there are no immediate signs that the two sides will agree to anything at all," with the U.S. administration refusing Iran's demand that sanctions be lifted before any negotiations start.
Prices also took a knock as Libya’s National Oil Corporation lifted a declaration of force majeure on loadings at the port of Zawiya from the Sharara field, the country's largest. That had been in place since late Friday, shutting in production of 290,000 barrels a day. The field resumed half that output earlier Monday, Reuters reported.
In other energy trading, gasoline futures advanced 0.2% to $1.84.35 a gallon by 7:54 AM ET (11:54 GMT), while heating oil gained 1.1% to $1.9102 a gallon.
Lastly, natural gas futures traded up 1.3% to $2.280 per million British thermal unit.
-- Reuters contributed to this report.