Oil settled 5% higher on Monday after Iran and the United States traded demands for compensation, dimming hopes for a deal to reopen the Strait of Hormuz. Iran is nearing a shipping-lane pact with Oman but still wants sanctions lifted, while Houthi attacks on a Saudi refinery and a U.S. strategic reserve at its lowest level since 1983 add further pressure on supply.
Oil prices settled 5% higher on Monday after Iran and the United States traded demands for compensation, dimming prospects for a deal to reopen the Strait of Hormuz.
Brent crude futures settled up $4.17, or 4.99%, at $87.72 a barrel, while WTI crude closed $3.95, or 5.05%, higher at $82.13 — the largest daily gains for both benchmarks since July 29.
Both benchmarks had fallen more than 7% last week on hopes that Iran and Oman were close to a deal reopening the strait, which carried a fifth of the world's oil and liquefied natural gas before the Middle East conflict began in late February.
Iran raises the price of reopening Hormuz
Iran said it is nearing a final pact with Oman to define new shipping lanes through the strait, but it repeated that Washington must meet other conditions — including compensation and an end to sanctions and military threats — before the waterway reopens. Tehran will not resume talks with the U.S. while Washington remains in breach of an interim deal signed in June, Iranian Foreign Minister Abbas Araqchi said Sunday.
U.S. President Donald Trump said Iran must pay compensation for "all of the people that they have killed and gravely wounded."
Attacks on refineries and tankers deepen supply fears
Iran-aligned Houthis said they struck Saudi Aramco's Jazan refinery on Sunday. Saudi Aramco has pushed back the restart of the 400,000-barrel-per-day plant to August 30 after two Houthi attacks in recent weeks, according to an alert from industry monitor IIR seen by Reuters. The attack came two days after Saudi Arabia signed a defence pact with Turkey and Pakistan in response to growing regional instability from the U.S.-Israeli war with Iran.
ADNOC, the United Arab Emirates' state oil company, said Friday that 15 of its vessels have been attacked while transiting the Strait of Hormuz since the conflict began. Ukraine's military, meanwhile, continued striking Russian energy infrastructure, hitting the Taneco oil refinery in Tatarstan and the ZapSibNeftekhim petrochemical plant in Russia's Tyumen region.
US reserves fall to their lowest since 1983
Crude oil stocks in the U.S. Strategic Petroleum Reserve fell by about 6.1 million barrels to 298.7 million barrels last week, the lowest level since January 1983, according to Department of Energy data.
Source: Commodities & Futures News
Trading involves risk.
Risk Disclaimer
