Oil prices surge due to political uncertainty following Iran president's death.

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Oil prices continued to rise on Monday amid political uncertainty in major oil-producing countries following the tragic death of Iran's President in a helicopter crash and Saudi Arabia's Crown Prince postponing his visit to Japan due to his father's health issues.

Brent crude gained 41 cents to reach $84.39 a barrel, its highest level since May 10, while U.S. West Texas Intermediate (WTI) crude for June edged up 23 cents to $80.29 a barrel, hitting its highest point since May 1. The June contract is set to expire on Tuesday, with the more active July contract trading at $79.89, up 31 cents.

The tragic incident involving Iranian President Ebrahim Raisi, a prominent hardliner, who was killed in a helicopter crash near the Azerbaijan border, added to the geopolitical tensions in the region. Additionally, Saudi Arabia's King Salman's health issues, leading to the postponement of Crown Prince Mohammed bin Salman's visit to Japan, contributed to the uncertainty in the oil market.

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Analysts speculated that WTI prices might rebound further toward $83.50 after surpassing the 200-day moving average of $80.02. They cited various factors contributing to the potential price hike, including China's property measures announced last week and improved economic indicators from the U.S. and China.

Despite the volatility caused by these developments, oil prices saw only marginal fluctuations. Analysts suggested that the oil market remained range-bound and awaited clarity on OPEC+ output policy, with the group scheduled to meet on June 1.

While geopolitical tensions usually influence oil prices, the market appeared relatively unaffected, given OPEC's significant spare capacity. Analysts reassured that Saudi Arabia's energy strategy would remain consistent despite the Crown Prince's health concerns.

In the United States, Washington capitalized on the recent dip in oil prices by purchasing 3.3 million barrels of oil at $79.38 per barrel to replenish its Strategic Petroleum Reserve following a significant sale from the stockpile in 2022.

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