Oil prices jumped Monday as doubt grew that Washington and Tehran will reach a deal to reopen the Strait of Hormuz to normal shipping traffic. President Trump said the U.S. is only semi-negotiating with Iran, while Tehran said any reopening still hinges on the U.S. lifting its naval blockade.
Oil prices jumped Monday as doubt grew that Washington and Tehran will reach a deal to reopen the Strait of Hormuz to normal shipping traffic.
The crude oil market rallied. U.S. West Texas Intermediate futures climbed about 5% to close at $82.13 a barrel. Brent crude, the international benchmark, was last up around 5% higher at $87.85 a barrel.
President Trump told Axios on Sunday that the U.S. is "only semi-negotiating" with Iran, after insisting last week that Washington and Tehran were holding talks. He indicated he would rely on the naval blockade to pressure Tehran rather than launch another wave of airstrikes. He also canceled a planned attack on Iran on Aug. 1 to allow for negotiations.
Oil stocks in the U.S. Strategic Petroleum Reserve have fallen below 300 million barrels, the lowest level since January 1983, as the conflict drags on. Prices had sold off more than 7% last week after Treasury Secretary Scott Bessent told CNBC a deal on Hormuz with freedom of movement for ships could come soon, though no agreement has been announced as Tehran's and Washington's positions hardened.
Iran ties Hormuz reopening to end of naval blockade
Iran's Foreign Ministry spokesman, Esmaeil Baqaei, said Monday that the U.S. must lift its blockade before Tehran will agree to fully open the strait. Iran and Oman are holding bilateral negotiations over shipping routes in the strait, he said.
The U.S. and Iran signed a memorandum of understanding on June 17 to open Hormuz to commercial ships, but the agreement collapsed as fighting erupted over which routes vessels could use. Iran then launched multiple attacks on tankers transiting Hormuz along Oman's coast under U.S. military protection, demanding ships sail through its territorial waters instead. The U.S. responded with multiple waves of airstrikes and reimposed its naval blockade in retaliation.
Iran says Oman talks are in their final stages
Iran said Sunday that a deal with Oman over transit through the strait was in its final stages, Reuters reported, though it reiterated that the waterway would only reopen once the United States met other conditions. Those conditions include compensation and an end to sanctions and military threats, according to the report.
Sources: CNBC, Investing.com
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