Oil prices rose Tuesday after an Iranian official said the Strait of Hormuz will stay shut until Tehran's conditions are met. The gain came even as President Trump's reparations demand dimmed prospects for a near-term U.S.-Iran deal, and as U.S. crude stockpiles sit at their lowest level in decades.
U.S. West Texas Intermediate futures traded 1.4% higher at $83.27 a barrel by 11:53 a.m. ET on Tuesday. Brent crude, the international benchmark, rose 1.3% to $88.85 a barrel over the same stretch.
Iran conditions Hormuz reopening
The secretary of Iran's Supreme National Security Council said Hormuz will remain closed unless the U.S. meets Tehran's conditions, according to Reuters. The market is weighing conflicting signals on whether Washington and Tehran will reach a deal to increase traffic through the strait.
Pakistan's Defense Minister Khawaja Asif told Bloomberg News that a peace arrangement or a deal is shaping up again. ING strategists struck a more cautious tone in a Tuesday note, writing: "The oil market remains very headline-driven, which leaves prices whipsawing." They added that current rhetoric suggests any deal remains some way off, leaving risks skewed to the upside for oil prices.
Trump's reparations demand complicates talks
U.S. oil had risen as much as 3% earlier Tuesday after President Trump demanded Iran pay reparations to the U.S., a move that dimmed prospects for an agreement. Trump on Monday also extended the suspension of a shipping law restricting the transport of goods between American ports to U.S. vessels, narrowing the waiver to vessels hauling certain energy resources.
The extension came after data showing U.S. government crude oil stockpiles have fallen to their lowest level in more than four decades.
Source: CNBC
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