Oil Extends Gains as Peace Prospects Dim

Crude oil traded around $85 a barrel on Tuesday as uncertainty over the Strait of Hormuz continued to support prices. Tensions remain elevated, with the US and Iran showing little sign of reaching an agreement over control of the key shipping route. President Donald Trump said Washington is not currently holding or planning talks with Tehran, while confirming that the US naval blockade remains in place. Despite his claim that Hormuz is open and mines have been cleared, shipping risks persist. A vessel was reportedly attacked while leaving the strait, suffering engine-room damage and a crew casualty, according to UK maritime authorities. Meanwhile, Gulf producers are finding alternative ways to maintain exports despite the disruption. Saudi Arabia has begun offering crude cargoes sourced from outside the chokepoint, suggesting it may be adopting measures similar to the United Arab Emirates to move oil through or around the affected area.

Crude oil climbed above $85 per barrel on Tuesday, rising for a third consecutive session as prospects for a new agreement between the US and Iran weakened after President Donald Trump said he was not interested in extending the interim peace deal. The memorandum of understanding signed in June, which was intended to give both sides 60 days to negotiate a longer-term peace agreement, officially expired on Monday. Meanwhile, Iran and Oman continue to negotiate an arrangement for managing shipping through the Strait of Hormuz, although the US is not involved in the talks. Washington is unlikely to back any deal that fails to ensure unrestricted passage through the strategically vital shipping route. At the same time, Middle Eastern producers appear to be becoming increasingly adept at covertly moving oil through Hormuz to global buyers while also supplying cargoes from outside the key chokepoint.

Crude oil climbed above $85 per barrel on Tuesday, rising for a third consecutive session as prospects for a new agreement between the US and Iran weakened after President Donald Trump said he was not interested in extending the interim peace deal. The memorandum of understanding signed in June, which was intended to give both sides 60 days to negotiate a longer-term peace agreement, officially expired on Monday. Meanwhile, Iran and Oman continue to negotiate an arrangement for managing shipping through the Strait of Hormuz, although the US is not involved in the talks. Washington is unlikely to back any deal that fails to ensure unrestricted passage through the strategically vital shipping route. At the same time, Middle Eastern producers appear to be becoming increasingly adept at covertly moving oil through Hormuz to global buyers while also supplying cargoes from outside the key chokepoint.