Shell and BP lifted as oil prices rise following Iran attacks on Kuwait Proactive uses images sourced from Shutterstock
Shares in Shell PLC (LSE:SHEL, NYSE:SHEL) and BP PLC (LSE:BP.) climbed on Monday as oil prices were driven higher by renewed uncertainty over whether the US and Iran can agree to a ceasefire deal.
Brent crude gained 3.1% to $93.92 a barrel as investors reassessed the outlook for the Middle East and the future of shipping through the Strait of Hormuz.
This sent Shell up 0.8% to 3,143p, while BP added 0.9% to 526.3p.
The start of June means the fighting in and around Iran has been going on for over three months.
Latest reports revealed that Kuwait’s air defences have been intercepting missile and drone attacks, with Iran releasing video footage of ballistic missile launches.
US central command said that it struck targets in Iran over the weekend, describing the moves as “self-defence” as it targeted “radar and command and control sites for drones”.
Earlier this morning, US President Donald Trump posted on social media that “Iran really wants to make a deal, and it will be a good one for the USA and those that are with us”
Latest reports revealed that Kuwait’s air defences have been intercepting missile and drone attacks, with Iran releasing video footage of ballistic missile launches.
US central command said that it struck targets in Iran over the weekend, describing the moves as “self-defence” as it targeted “radar and command and control sites for drones”.
US President Donald Trump posted on social media this morning that “Iran really wants to make a deal, and it will be a good one for the USA and those that are with us […] Just sit back and relax, it will all work out well in the end”.
But the rise in oil prices showed that the market is not quite as relaxed.
Matt Britzman, analyst at Hargreaves Lansdown, said: “Oil has found its way back onto the worry list, as hopes for a cleaner US-Iran breakthrough run into fresh uncertainty.”
He added that investors had “started to price in some relief from a possible ceasefire extension and reopening of the Strait of Hormuz, but the risk premium has not disappeared, especially with the route still central to global energy flows”.
The latest rise in crude prices came as investors continued to monitor negotiations involving Iran, months after US and Israeli strikes on the country that started at the end of February.
Deutsche Bank strategist Jim Reid said markets appeared caught between hopes of a breakthrough and fears that talks could collapse.
“We’ve never felt closer to a deal but potentially never felt closer to it all falling apart with isolated strikes becoming more frequent, including some again over the weekend,” he said.
A prolonged closure of the Strait of Hormuz could eventually trigger a “non-linear tipping point of economic stress”, Reid added, while reports on Monday of renewed exchanges of fire between Israel and Hezbollah were further complicating efforts to secure a lasting settlement.