Oil rises as hopes for a quick reopening of the Strait of Hormuz fade
Oil prices rose today, buoyed by optimism over talks aimed at reopening the Strait of Hormuz, though gains were capped by Iran’s insistence that the United States must meet several conditions before the waterway is reope
Translated by Qiyas from الجريدة — Original source
Oil prices rose today, buoyed by optimism over talks aimed at reopening the Strait of Hormuz, though gains were capped by Iran’s insistence that the United States must meet several conditions before the waterway is reopened.
The two benchmark crude oils had fallen by more than 7 percent last week, amid hopes that Iran and Oman were close to reaching an agreement that would lead to the reopening of the Strait of Hormuz, through which one-fifth of the world’s oil supplies passed before the war.
While Iran said on Sunday that its agreement with Oman had reached the final stages, it reiterated that the waterway would not be reopened until Washington meets additional conditions, including paying compensation to Iran for the wide-ranging attacks launched against it.
Iranian Foreign Minister Abbas Araghchi said on Sunday that Iran and the United States were not holding talks, and that Tehran would not initiate them as long as Washington violated the interim agreement signed in June. In a note, analysts at S&P Global Platts Research said, “Although the strait remains effectively closed, oil is currently trading between $80 and $85 a barrel, reflecting hope for a resolution in the near future.”
In another threat to supplies, Iran-aligned Houthis said they attacked Saudi Aramco’s Jazan refinery on Sunday.
The attack came two days after the kingdom signed a defense agreement with its Sunni allies Turkey and Pakistan, in response to growing regional instability stemming from the US-Israeli war on Iran. Abu Dhabi National Oil Company (ADNOC) said on Friday that 15 of its vessels had been attacked while transiting the Strait of Hormuz since the beginning of the conflict.
Sujatha Sachdeva of New Delhi-based SS Wealth Street Research said, “Any significant progress toward restoring unrestricted shipping flows could put downward pressure on oil prices, while a collapse of negotiations or a resumption of supply disruptions could quickly bring back geopolitical risk premiums.”
