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Oil extends rally after Iran seizes UK tanker, Libya disruption
[SYDNEY] Oil extended gains on Monday as tensions remained high in the Middle East after Iran seized a British tanker in the Straits of Hormuz on Friday, and Libya's largest oil field declared force majeure after interference by an unidentified group shut down production.
Brent futures rose 1.2 per cent, adding to Friday's 0.9 per cent gain. UK Defense Minister Tobias Ellwood sought to de-escalate tensions with Iran on Sunday, calling for the two sides to reach a solution, after the government had warned Tehran the previous day of "serious consequences" if the captured Stena Impero tanker was not released.
Meanwhile, Libyan oil output dropped to its lowest in five months after the disruption at the Sharara field. Production at the facility was gradually resuming after a valve issue was resolved, according to two people familiar with the matter.