Oil climbed for a fourth straight session as skepticism over a quick Hormuz reopening collided with fresh attacks on shipping and refineries across the Middle East. WTI settled near $83 a barrel while the US Strategic Petroleum Reserve fell to its lowest level since 1983, leaving Washington with little cushion against a further shock.
West Texas Intermediate rose 1.3% to settle at $83.20 a barrel in New York on Tuesday, while Brent for October settlement climbed to $88.91, marking a fourth consecutive session of gains as traders stayed skeptical that a deal would quickly restore flows through the Strait of Hormuz.
Pakistan and Oman signal progress on the strait
Pakistan's defense minister said Tuesday that the US and Iran are close to some sort of arrangement on reopening the strait. Talks between Oman and Iran have also reached an advanced stage, according to a Qatari foreign ministry spokesperson cited by Al Jazeera.
Still, prices had surged earlier after President Trump made sweeping new demands on Tehran, and Iran's foreign minister Abbas Araghchi said Tehran is not currently holding direct talks with Washington. That widening gap keeps the negotiating paths apart even as regional officials describe momentum.
Attacks widen beyond the strait
A Navy helicopter fired two Hellfire missiles at a Panama-flagged cargo vessel attempting to transit the Gulf of Oman, US Central Command said, and a refinery in Libya was also attacked on Monday. Houthi militants separately claimed responsibility for a strike on Saudi Arabia's Jazan refinery, prompting Saudi Aramco to push back the plant's restart to late August.
A cargo ship was also struck in the Red Sea's Bab al Mandeb strait with reported fatalities, and an Abu Dhabi National Oil Company tanker came under attack inside Hormuz over the weekend. The pattern shows the disruption now extends well beyond the strait itself.
US reserves hit a 43-year low
Crude held in the US Strategic Petroleum Reserve has fallen below 300 million barrels, the lowest level since 1983. The EIA has raised its 2026 and 2027 crude price forecasts, citing July's Middle East production disruptions and ongoing shipping-route risk.
Chicago Fed president Austan Goolsbee said inflation, not labour-market weakness, remains the central bank's most pressing concern, days ahead of Wednesday's CPI print that markets are treating as the next catalyst for the dollar and rate expectations. The reserve buffer that would normally absorb a shock is now at a four-decade low.
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