Oil Prices Rise as Hormuz Reopening Remains Uncertain
Brent and WTI climbed Monday after Iran said a shipping-lane deal with Oman is nearing completion, but Tehran said the Strait of Hormuz will only reopen once Washington meets additional conditions.
MONTREAL (Oil Monster): Oil prices rose on Monday on uncertainty over the reopening of the Strait of Hormuz anytime soon, as Iran said a deal with Oman defining new shipping lanes was in its final stages but insisted the U.S. must still meet other conditions.
Brent crude futures rose 91 cents, or 1.09%, to $84.46 a barrel by 0056 GMT, while U.S. West Texas Intermediate crude futures rose 61 cents, or 0.78%, to $78.79 a barrel.
What Readers Should Know
- Brent rose 1.09% to $84.46 a barrel and WTI gained 0.78% to $78.79 a barrel by 0056 GMT Monday.
- Iran says a shipping-lane deal with Oman is in its "final stages," but the Strait of Hormuz will not reopen until the U.S. meets other conditions.
- Both benchmarks fell more than 7% last week on earlier hopes of a Hormuz reopening.
- Iran will not resume direct talks with the U.S. unless Washington honors a June interim deal, its foreign minister said.
- Houthi forces say they struck Saudi Aramco's Jazan refinery on Sunday, two days after Saudi Arabia signed a defense pact with Turkey and Pakistan.
- ADNOC says 15 of its vessels have been attacked transiting the Strait of Hormuz since the conflict began.
Why Oil Prices Rose Monday
Both benchmarks had fallen more than 7% last week on hopes that Iran and Oman were close to reaching a deal that would result in a reopening of the Strait of Hormuz, which carried a fifth of the world's oil before the war.
Oil price falls back to pre-Iran war levels
What Iran Is Signaling on the Oman Deal
While Iran said on Sunday that a deal with Oman was in its "final stages," it reiterated that the waterway would only reopen once Washington met other conditions, including U.S. compensation to Iran for its widespread attacks.
"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," said Tim Waterer, chief market analyst at KCM Trade.
Why Direct U.S.-Iran Talks Remain Stalled
Iran and the U.S. are not engaged in talks, and Tehran will not start them as long as Washington breaches an interim deal signed in June, Iranian Foreign Minister Abbas Araqchi said on Sunday.
How the Jazan Refinery Attack Adds to Supply Risk
In a further threat to supply, a Saudi oil plant was attacked over the weekend. The Iran-aligned Houthis said they had hit Saudi Aramco's Jazan refinery on Sunday, two days after the kingdom signed a defense pact with Sunni Muslim allies Turkey and Pakistan in response to growing regional instability from the U.S.-Israeli war on Shi'ite Iran.
How Hormuz Transits Have Been Affected
Separately, the United Arab Emirates' ADNOC said on Friday that 15 of its vessels had been attacked transiting the Strait of Hormuz since the beginning of the conflict.
Oil Price Questions and Answers
Why did oil prices rise on Monday?
Brent and WTI rose after Iran said a deal with Oman on new Strait of Hormuz shipping lanes was in its final stages, though the strait's reopening still depends on the U.S. meeting other conditions.
What is the current price of Brent and WTI crude?
Brent crude futures rose 91 cents, or 1.09%, to $84.46 a barrel, while WTI rose 61 cents, or 0.78%, to $78.79 a barrel, as of 0056 GMT Monday.
Why did oil prices fall last week?
Both benchmarks fell more than 7% last week on hopes that Iran and Oman were close to a deal that would reopen the Strait of Hormuz.
What conditions does Iran want before reopening Hormuz?
Iran says the waterway will only reopen once Washington meets other conditions, including U.S. compensation to Iran for its widespread attacks.
What happened at the Jazan refinery?
Iran-aligned Houthi forces said they struck Saudi Aramco's Jazan refinery on Sunday, two days after Saudi Arabia signed a defense pact with Turkey and Pakistan.
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Courtesy: www.reuters.com