Market News

(Bloomberg) -- Oil edged higher after the US advised ships to steer clear of Iranian waters when navigating the Strait of Hormuz, reviving a risk premium that had ebbed in recent days amid nuclear talks.

West Texas Intermediate crude futures rose 1.3% to settle above $64 a barrel after the US Department of Transportation said in a maritime advisory on Monday that American-flagged ships should stay as far as possible from Iranian waters. The agency cited a recent incident in which Iran’s Islamic Revolutionary Guard Corps harassed a US-flagged tanker as it was transiting through the waterway last week.

The guidance stoked investor fears of a short-term disruption in the vital Hormuz chokepoint, through which about a third of the world’s oil flows, as well as a broader conflagration in the oil-rich Middle East region. Iran has threatened to close Hormuz during times of geopolitical tension.

The development reversed bearish momentum that followed pledges by Iran and the US to continue talks following what they described as positive discussions in Oman on Friday. Tehran said the session — aimed at defusing tensions over the Islamic Republic’s nuclear program — was “a step forward.”