Oil Prices Climb as Hormuz Reopening Remains Uncertain
Oil prices rise as uncertainty over the reopening of the key Strait of Hormuz keeps traders on edge
- Oil prices rise as uncertainty persists over the reopening of the Strait of Hormuz.
- Iran says its shipping deal with Oman is in the final stages but sets conditions for reopening.
- Attacks on regional oil facilities and vessels raise fresh concerns over global supply disruptions.
Oil prices rose on Monday as uncertainty continued over the reopening of the Strait of Hormuz, with Iran saying a deal with Oman to establish new shipping lanes was nearing completion but insisting that the United States must satisfy additional conditions.
Brent crude futures gained 91 cents, or 1.09%, to $84.46 per barrel by 0056 GMT, while U.S. West Texas Intermediate crude rose 61 cents, or 0.78%, to $78.79 per barrel.
Both benchmarks had declined by more than 7% last week amid hopes that Iran and Oman were close to an agreement that could facilitate the reopening of the strategic waterway, which carried about one-fifth of the world’s oil supplies before the war.
Iran said on Sunday that the agreement with Oman was in its “final stages” but maintained that the Strait would only reopen after Washington fulfilled additional conditions, including compensation to Iran for widespread attacks.
Tim Waterer, chief market analyst at KCM Trade, said traders were waiting for concrete signs that the negotiations would lead to a reopening.
“Traders have been conditioned by the on-again, off-again nature of the negotiations and are waiting for tangible evidence, such as verified tanker movements or formal agreements, before further unwinding the risk premium,” he said.
Iranian Foreign Minister Abbas Araqchi said Iran and the United States were not currently engaged in talks and that Tehran would not resume negotiations while Washington continued to breach an interim agreement signed in June.
Meanwhile, concerns over oil supplies were further heightened after a Saudi oil facility was attacked over the weekend.
The Iran-aligned Houthis claimed they had targeted Saudi Aramco’s Jazan refinery on Sunday, two days after Saudi Arabia signed a joint defence pact with Turkey and Pakistan amid growing regional tensions linked to the conflict involving the United States, Israel and Iran.
The United Arab Emirates’ ADNOC also said on Friday that 15 of its vessels had been attacked while transiting the Strait of Hormuz since the conflict began.
The developments have kept traders on alert over potential disruptions to global energy supplies, supporting oil prices as markets await clearer signs of when shipping through the crucial waterway can resume.
