Oil rises 2% to more than one-week high as US-Iran peace hopes dim
A drone view of a pump jack and drilling rig south of Midland, Texas, U.S. June 11, 2025. REUTERS/Eli Hartman
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Aug 11 : Oil prices rose more than 2 per cent on Tuesday to over one-week highs as hopes for a U.S.-Iran deal to end the war and reopen the Strait of Hormuz faded after President Donald Trump demanded compensation from Tehran.
Brent crude futures rose $1.92, or 2.19 per cent, to $89.64 a barrel by 0805 GMT, while U.S. West Texas Intermediate crude futures were up $1.91, or 2.33 per cent, to $84.04 a barrel, with both benchmarks trading at their highest levels since July 31.
Prices extended gains after both contracts jumped more than 5 per cent on Monday after Trump responded to Iran’s conditions for a peace deal with his own demands that Iran pay compensation for people killed in wars, attacks and protests, which is likely to complicate efforts to reopen the Strait of Hormuz.
Later in the day he added that the U.S. had control of the strait and had swept the strategic oil waterway for Iranian mines.
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“There’s no clear path to a solution and to a full reopening of the strait at this point in time and that’s adding renewed upside pressure on prices,” said Saxo Bank head of commodity strategy Ole Hansen, adding that there is a meaningful level of supply disruption ongoing.
Shipping data showed that traffic through the Strait of Hormuz fell to six vessels on Monday, compared with a 10-day average of about 11 vessels.
In a note on Monday, analysts at Barclays said that in the week ending August 7, crude oil and refined product net exports through the Strait of Hormuz averaged 3 million barrels per day (bpd), down from 4.4 million bpd the previous week.
Before the Iran conflict began in late February, about one-fifth of global daily oil and liquefied natural gas supplies flowed through the Strait of Hormuz.
Saudi Aramco has postponed the restart of its 400,000-barrel-per-day Jazan refinery to August 30 after the Houthis claimed two attacks on the plant on Sunday.
“The chokehold risk around both the Strait of Hormuz and the Bab el-Mandeb remains highly significant. Even intermittent restrictions or the threat of further incidents keep insurance costs elevated and force longer shipping routes … hence energy flows look likely to stay constrained near term,” said Tim Waterer, chief market analyst at KCM Trade.
Meanwhile, the Abu Dhabi National Oil Company (ADNOC) is offering spot crude in a tender, its eighth issued since the start of June as the UAE state oil company works to move oil from inside the Strait of Hormuz.
Source: Reuters
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