Oil prices climb on irreconcilable U.S.-Iran demands

Crude oil prices climbed Tuesday, driven by a heightened sense of market anxiety. Traders are contemplating the potential for a prolonged blockade of the Strait of Hormuz, stemming from irreconcilable positions between Iran and the United States.

Brent crude for October delivery advanced 2.55% to $89.96 a barrel by 09:00 GMT, having briefly surpassed $90. West Texas Intermediate, the U.S. benchmark for September, gained 2.91% to $84.52. The market had already seen significant gains on Monday.

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Iran is asking for compensation for the damages that have been caused to it during the military conflict of the last five months. This demand was never mentioned in any of our negotiations or meetings.

These increases are fueled by conditions set by Tehran for reopening the Strait of Hormuz, a vital route for global hydrocarbon trade, which Washington finds difficult to accept. Iranian demands include compensation for damages incurred during the past five months of conflict. U.S. President Donald Trump countered by demanding compensation from Iran for lives lost and injured, referencing past attacks.

Analysts like Arne Lohmann Rasmussen of Global Risk Management believe Trump's statements reduce the likelihood of an imminent reopening of the strait. This situation, coupled with ongoing maritime traffic disruptions in the Red Sea by Houthi rebels and declining global oil reserves, is pushing crude prices higher. ING analysts note that market optimism quickly fades without concrete progress in negotiations, as investors anticipate that a reopened Hormuz would significantly increase oil supply and lower prices.

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In the same way, I also demand compensation from Iran for all the people they have killed and injured.