Oil Holds Advance on US-Iran Deal Uncertainty

Crude oil held above $82 per barrel on Tuesday after rising for three consecutive sessions, supported by 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.

Crude oil rose above $82 a barrel on Monday, extending gains for a third consecutive session and reaching its highest level in a week, 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.

Crude oil rose to around $81 per barrel on Monday, extending gains from last week as uncertainty over the Strait of Hormuz continued to support prices. Iran and Oman have yet to finalize an agreement to reopen the strategic waterway, while conflicting signals from Tehran and Washington have raised doubts over how quickly a deal could be reached. Iranian Foreign Minister Abbas Araghchi said Tehran is not currently holding direct talks with the US and reiterated that reopening Hormuz would require Washington to lift its blockade of Iranian shipping and provide compensation for damages. This contrasts with earlier US indications that an agreement could be close, while President Donald Trump said Washington was now “low-keying it.” Elsewhere, Iran-backed Houthi militants in Yemen claimed an attack on Saudi Arabia’s Jazan refinery, while a tanker operated by Abu Dhabi National Oil Co. came under attack in Hormuz over the weekend.