Brent Extends Rally on US-Iran Deal Uncertainty

Brent crude oil pared earlier gains to around $87.6 per barrel on Tuesday, after a spokesperson for Qatar’s foreign ministry said negotiations between Oman and Iran were at an advanced stage, offering some hope of progress toward an agreement. Still, President Donald Trump introduced new demands on Tehran, complicating negotiations over the strategic waterway. Trump said that Iran would be required to provide compensation for people it has killed in conflicts as part of future negotiations, following Tehran’s own calls for reparations related to the war. Oil prices were also supported by concerns over US inventories, with the latest data showing that crude stocks held in the Strategic Petroleum Reserve had fallen to their lowest level in more than four decades.

Brent climbed above $89 per barrel on Tuesday, rising for the fifth straight session amid heightened uncertainty over a potential deal between the US and Iran to end the war and reopen the Strait of Hormuz. President Donald Trump issued sweeping new demands on Iran, including compensation for people the Islamic Republic has killed in conflicts, after Tehran reiterated calls for reparations as part of negotiations to wind down the conflict. The demands have clouded prospects for a near-term agreement, keeping markets wary of prolonged supply disruptions. Trump also indicated that he was prepared to allow economic pressure on Iran to intensify rather than launch new military strikes to force the reopening of Hormuz. Meanwhile, Iran and Oman have yet to reach an agreement to reopen the waterway, as Tehran is making the move contingent on securing an accord with the US.

Brent rose approached $88 a barrel on Monday, extending gains for a fourth consecutive session and reaching its highest level in almost two weeks, as uncertainty mounted over a deal between the US and Iran to end the war and reopen the Strait of Hormuz. US President Trump lashed out at Iran’s demands for war compensation as part of negotiations to wind down the conflict. Tehran has said the US must lift its blockade before it would agree to fully reopen Hormuz. Trump also signaled on Sunday that he was prepared to allow economic pressure on Iran to intensify rather than launch fresh military strikes. Elsewhere, Houthi militants claimed responsibility for an attack on Saudi Arabia’s Jazan refinery, while a tanker operated by Abu Dhabi National Oil Co. came under attack in the Strait of Hormuz over the weekend. Meanwhile, crude inventories held in the US Strategic Petroleum Reserve have fallen below 300 million barrels, the lowest level since 1983, as the conflict continues.