Oil prices climbed for a third straight session after Iran said it would keep the Strait of Hormuz closed and shift to a more offensive military posture. Washington ruled out extending its ceasefire with Tehran, while Saudi Aramco resumed limited loadings through the strait and tensions spread to the Red Sea.
Brent crude futures rose 59 cents, or 0.7%, to $91.46 a barrel at 12:31 p.m. ET, while U.S. West Texas Intermediate crude futures gained 75 cents, or 0.9%, to $85.25 a barrel. Both contracts touched their highest levels in three weeks earlier in the session, extending a third day of gains.
Iran vows to keep the strait closed
Top Iranian negotiator Mohammad Baqer Qalibaf said Tuesday that Iran will keep the Strait of Hormuz closed until the United States meets the conditions of the interim deal signed in June. His comments followed a senior Iranian official telling Reuters a day earlier that Iran would shift to a fully offensive military posture as efforts toward a permanent end to the war have stalled.
Trump, who had previously called that deal "over," said Tuesday that talks between Washington and Tehran were neither taking place nor scheduled, though he added the strait remained open. The market's reaction was muted. According to Reuters: "What you are seeing today is headline fatigue", said Tracy Shuchart, senior economist at NinjaTrader. Mohit Kumar, an economist at Jefferies, said the two sides are not yet at the pain points that would push either toward a deal, adding pressure on crude oil prices in the near term.
Aramco resumes limited loadings
Some oil is still moving through Hormuz, though crossings remain in the single digits. Saudi Aramco has resumed oil loadings from inside the strait and is offering cargoes via ship-to-ship transfers off Fujairah in the UAE. Iran has separately been negotiating with Oman on managing the strait and says the two sides are close to a deal, though Trump responded to those talks with a threat to bomb Oman.
Tensions spread beyond the strait
Elsewhere, Yemen's Houthis launched missiles at vessels they described as a Saudi military ship and four escorts in the Red Sea, according to military spokesperson Yahya Saree. The United Arab Emirates later said its air defense systems had detected a missile threat, before issuing a follow-up alert saying the situation was safe. In Russia, four sources told Reuters that the country is rerouting Kazakhstan's crude oil exports from the Baltic port of Ust-Luga to the Black Sea port of Novorossiysk, freeing up capacity for more Russian oil exports from the Baltic amid heightened Black Sea security risks.
Source: Commodities & Futures News
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