Oil held near one-week highs on Tuesday as hopes faded for a U.S.-Iran deal to end their war and reopen the Strait of Hormuz. Saudi Aramco also pushed back the restart of its Jazan refinery after weekend Houthi attacks on the plant.
Oil steadied at more than one-week highs on Tuesday as hopes dimmed for a deal between the United States and Iran to end their war and reopen the Strait of Hormuz, after President Donald Trump demanded compensation for damage the U.S. has incurred.
Benchmarks hold after Monday's jump
Brent crude futures were flat at $87.81 a barrel by 0013 GMT, while U.S. West Texas Intermediate futures held at $82.20 a barrel. Both benchmarks had risen more than 5% on Monday to their highest levels since July 31, after Trump answered Iran's conditions for a peace deal with his own demand that Tehran pay compensation for people killed in wars, attacks and protests — a condition likely to complicate efforts to reopen the strait. He later said the United States had control of the strait and had swept the waterway for Iranian mines.
Tim Waterer, chief market analyst at KCM Trade, said last week's optimism over a deal is now unwinding, leaving oil with "a decidedly bid tone."
Refinery outage adds to Gulf supply risk
Saudi Aramco has postponed the restart of its 400,000-barrel-per-day Jazan refinery to August 30 after the Houthis claimed two attacks on the plant on Sunday. Waterer said elevated insurance costs and longer shipping routes look likely to keep crude oil flows near the Strait of Hormuz and the Bab el-Mandeb constrained near term. Barclays estimated that net exports of crude and refined products through the Strait of Hormuz averaged 3 million barrels per day in the week ending August 7, down from 4.4 million barrels per day the week before.
Iraq, meanwhile, raised its September official selling price for Basra Medium crude to Asia by $2.50 to minus $4 a barrel against the average Oman/Dubai quotes.
Source: Commodities & Futures News
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