Oil prices rose on Tuesday as talks between the U.S. and Iran over the Strait of Hormuz remained stalled, exacerbating concerns over a prolonged disruption to energy supplies.
Benchmark Brent oil futures had risen 0.4% to $91.22 a barrel, while U.S. West Texas Intermediate crude futures had advanced by 1.0% to $85.37 a barrel by 09:22 ET (13:22 GMT).
“Sentiment remained supported by U.S. President Donald Trump’s decision not to extend the U.S.-Iran peace agreement and continued security concerns in the Strait of Hormuz, raising fears of supply disruptions,” analysts at ING said in a note.
Oil prices advanced on Monday after Trump said the U.S. would not seek an extension in a ceasefire deal with Iran, which was signed in mid-June and expired on Monday. Trump reiterated that the U.S. maintained full control of the Strait of Hormuz and that talks with Iran were ongoing, claims that Iran has denied.
The president also threatened to bombard Oman if it “gets in the way” on U.S. negotiations with Iran. Previously, Iran and Oman said they were engaged in talks over opening shipping routes through the Strait of Hormuz. While such an agreement could help improve global crude supplies, both countries have made no announcements on a definitive agreement.
Shipping data showed commercial traffic through the Strait of Hormuz is still at a fraction of pre-war levels, as fears of Iranian attacks largely dissuaded attempted crossings. The United Kingdom Maritime Trade Operations agency also said on Tuesday that a vessel was struck by an unknown projectile as it was transiting outbound in the Strait of Hormuz, resulting in damage to the vessel’s engine room and a crew casualty.
The Strait of Hormuz is a vital chokepoint for global shipping, hosting roughly 20% of global oil flows prior to start of the conflict in February.
Source: Investing.com
