Oil prices rose almost 2% on Monday after Iran said the United States must meet further demands before the Strait of Hormuz can reopen. Brent crude rose to $84.95 a barrel and U.S. crude rose to $79.51, a week after both benchmarks fell more than 7%. Iran's foreign minister said Tehran will not resume talks with Washington while the U.S. breaches a June interim deal.
Oil rose almost 2% on Monday after Iran said the United States must satisfy several demands before the Strait of Hormuz can reopen. The gains came a week after both benchmarks fell more than 7% 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 that began at the end of February.
Brent crude futures climbed $1.40, or 1.7%, to $84.95 a barrel by 1218 GMT. U.S. West Texas Intermediate crude gained $1.33, or 1.7%, to $79.51.
Iran ties reopening to U.S. concessions
Iran said it is nearing a final pact with Oman to define new shipping lanes through the Strait of Hormuz. Tehran, however, repeated that the U.S. must first meet other conditions, including compensation and an end to sanctions and military threats, before the waterway reopens. Iran and the U.S. are not engaged in talks, and Tehran will not start them while Washington breaches an interim deal signed in June, Iranian Foreign Minister Abbas Araqchi said on Sunday. According to SEB Research analysts, "oil is currently trading at $80 to $85 per barrel", even though the strait remains essentially closed.
Attacks on shipping and refining raise supply risk
Houthi forces aligned with Iran said they struck Saudi Aramco's Jazan refinery on Sunday, 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 on Shi'ite Iran. Separately, ADNOC said 15 of its vessels have been attacked while transiting the Strait of Hormuz since the conflict began. Sugandha Sachdeva, founder of SS WealthStreet, said progress toward restoring unrestricted shipping could weigh on oil prices, while a breakdown in negotiations or renewed supply disruptions could quickly revive the geopolitical risk premium.
Source: Investing.com
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