- Oil prices are climbing as Iran’s latest demands for reopening the Strait of Hormuz dampen hopes for stability in global energy markets.
- Brent crude rose more than 1 percent on Monday, with October futures at $83.77 a barrel, up about 16 percent compared with before the start of the US and Israel’s war on Iran.
- Shipping in the strait, a conduit for about one-fifth of global oil supplies before the war, has effectively collapsed, causing the largest energy disruption in recorded history.
- Transits through the strait have fallen drastically, from roughly 130 before the conflict to between 8 and 15 vessels on August 4–6, according to MarineTraffic.
- Iran has insisted on controlling shipping in the strait, threatening to attack commercial vessels on unapproved routes, and has been blamed for most violent incidents in the region.
- Analysts express scepticism about a quick deal, noting that even if an agreement is announced, it could prove fragile and limit how far oil prices could fall.
Oil prices are climbing as Iran's demands for reopening the Strait of Hormuz create uncertainty in global energy markets. Brent crude rose over 1% on Monday, reaching $83.77 a barrel, amid fears that Tehran's conditions, including U.S. concessions, will hinder stability.123
Iranian Foreign Minister Abbas Araghchi stated that while Iran and Oman are close to an agreement, the strait will not reopen until Washington meets certain conditions, including easing sanctions and paying war reparations. The strait, which previously facilitated about one-fifth of global oil supplies, has seen shipping effectively collapse since the conflict began in February, leading to the largest energy disruption in recorded history.4
According to ship-tracking platform MarineTraffic, only 8 to 15 vessels crossed the strait on August 4-6, a stark contrast to the roughly 130 transits before the conflict. The International Maritime Organization reported at least 64 violent incidents and 17 deaths involving commercial vessels in the region since the war began, most attributed to Iran.
Tim Waterer, chief market analyst at KCM Trade, noted, “The lack of concrete movement... is keeping a risk premium in the price.” He added that skepticism remains about how quickly a workable deal can be reached, stating, “Even if an agreement is eventually announced, history suggests these understandings can prove fragile.”
“Brent crude rose more than 1% to $83.77 a barrel, up 16% from before the US-Israel war on Iran, as transits through the strait fell to just 8-15 vessels daily. Analysts warn any deal could prove fragile, limiting how far prices might fall even after a breakthrough.”
