Brent crude rises nearly 5%, surpasses $87 on Iran's latest demands to U.S.

The price of Brent crude oil for October delivery surged by 4.99% on Monday, closing at $87.72 per barrel on the London futures market. This significant increase is attributed to recent demands made by Iran to the United States, which appear to be hindering the prospects of a peace agreement and the reopening of the Strait of Hormuz.

European benchmark North Sea oil advanced by $4.17 on the ICE Futures Europe exchange in London, compared to its previous trading session's price of $83.55. The rally began after Tehran announced six conditions over the weekend for reopening the vital Strait of Hormuz. These demands include war reparations, the lifting of sanctions, an end to the naval blockade, and the release of frozen Iranian funds.

Iranian Foreign Ministry spokesperson Ismail Baqaei reiterated on Monday that no peace negotiations are currently underway with the United States, stating, "We remain in a state of war." While acknowledging indirect communication through intermediaries, Baqaei clarified that any potential agreement with Oman regarding Hormuz would be limited to ensuring a safe shipping route and would not signify the unblocking of the strait. Prior to the conflict, approximately 20% of the global crude oil maritime traffic passed through this waterway.

Iran has kept the Strait of Hormuz closed since mid-July, following new U.S. airstrikes on southern Iranian territory. In response, Tehran launched attacks on U.S. targets and interests in Middle Eastern countries. The United States subsequently reimposed a naval blockade on Iranian ports and vessels.

Konstantinos Chrysikos, head of client relations management at Kudo.com, noted in an analysis that the rise in crude oil prices stems from "persistent uncertainty" surrounding the diplomatic process in the Middle East and the situation at Hormuz. Chrysikos added that "the lack of clarity on the possibility of a full reopening of the maritime route (referring to Hormuz) could expose crude prices to great volatility."