Oil prices hold near one-week high as Strait of Hormuz reopening remains in limbo
Oil prices stayed near their highest level in more than a week on Tuesday as hopes of a US-Iran deal to end their war and reopen the Strait of Hormuz weakened. WTI crude stood 0.09% up to $82.22 a barrel, while Brent crude edged to $87.80 a barrel, around 7:20 am IST.In the earlier session, both oil benchmarks had jumped more than 5%, reaching their highest levels since July 31. The rise came after US President Donald Trump responded to Iran’s conditions for a peace deal by demanding compensation from Tehran for people killed in wars, attacks and protests.Trump later said the US had control of the Strait of Hormuz and had swept the strategic waterway for Iranian mines.The fresh demands have made an agreement to reopen the key oil route more difficult. Oil prices had fallen more than 7% last week as hopes grew that Iran and Oman were close to reaching a deal that could lead to the reopening of the strait.The waterway carried a fifth of the world’s oil and liquefied natural gas before the Middle East conflict began in late February.
Iran says US must meet conditions
Iran has said the US must lift sanctions on Tehran and meet several other conditions before the Strait of Hormuz can be reopened.Iran also said it was close to a final agreement with Oman on new shipping lanes through the strait. However, it has maintained that compensation, an end to sanctions and an end to military threats from the US are among the conditions that must be met.Iranian foreign ministry spokesperson Esmaeil Baghaei said on Monday that the strait would remain closed until the US ended its naval blockade against Iran, according to local media reports.Speaking at a weekly press briefing in Tehran, Baghaei blamed the closure of the strategic waterway on military aggression by the US and Israel. He said reopening it would depend on the conditions imposed on Iran and the waterway by the US and Israel, Iran’s semi-official Tasnim News Agency reported.Baghaei said, “As long as the US naval blockade continues, the necessary conditions for the reopening of the Strait of Hormuz do not exist.”He also called on Washington to stop and reverse its “destructive actions” so that the two sides could negotiate their next steps.The Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. It is a major route for crude oil and Liquefied Natural Gas (LNG) shipments from Gulf exporters to global markets.Baghaei said talks with Oman over maritime transit were being held only between the two neighbouring countries.
No direct US-Iran talks, says Tehran
Iranian foreign minister Seyed Abbas Araghchi said on Sunday that there were currently no active negotiations between Iran and the US.Speaking to media personnel at the Foreign Ministry’s Centre for Political and International Studies, Araghchi said, “We currently have no negotiations with the United States. Intermediaries are still making efforts to find ways to resume negotiations. From our perspective, there can be no resumption of talks until the United States ends its violations of the Memorandum of Understanding (MoU) and makes amends for the breaches it has committed,” Tasnim News Agency reported.Araghchi said talks could not restart until Washington stopped violating the Memorandum of Understanding (MoU) and addressed the breaches.He said technical discussions with Oman on a revised maritime route through the Strait of Hormuz were nearing completion.However, Araghchi stressed that an agreement with Oman would not automatically mean the strait would reopen.“Of course, this does not mean the opening of the Strait of Hormuz. This agreement may be reached, but the opening of the Strait of Hormuz is subject to a series of conditions.”Meanwhile, the ongoing geopolitical circumstances have kept oil prices volatile amid concerns of energy supply crunch. However, even as prices continue to rise, the spike is far lower than seen in the earlier phase of the conflict, when crude soared to $126 per barrel.
