Brent crude was at $88.50 a barrel after gaining 6 per cent last week

Asian shares were flat on Monday while investors kept a wary eye on oil prices, which notched sizeable gains last week as the lack of progress towards ending the Iran war kept inflation risks tilted to ​the upside.

Progress towards peace talks and oil tanker traffic through the strategic Strait of Hormuz ​remained halted. Iran on Saturday called on the US to accept defeat, while President Donald Trump urged Americans to accept higher ‌gasoline prices while the conflict continues.

Brent crude was at $88.50 a barrel after gaining 6 per cent last week.

While there is still no resolution to the Iran/Hormuz impasse, our base case remains that oil prices will stay in a $70-$100 range with Iran preventing it going lower and the US moving to try and calm things down whenever it gets above $100, Shane Oliver, chief economist at AMP, said in a note.

The risk remains that there will be no sustainable peace deal, the flow of oil out of the Middle East remains down 10 per cent-15 per cent on normal levels and that we will have to face higher oil prices as reserves ‌run down, Oliver said.

On Monday, MSCI’s broadest index of Asia-Pacific shares outside Japan was flat, while Nikkei edged 0.4 per cent higher. Australia’s resources-heavy shares slid 0.3 per cent.

South Korea’s stock markets are closed on Monday for a public holiday.

All eyes are on the release of China’s activity data for July on Monday after its exports boomed on robust international AI demand to support the world’s second largest economy. Forecasts are centred on a slowdown in industrial output growth to 4.8 per cent, from 5.3 per cent previously, while retail sales likely rose 1.5 per cent.