Oil Prices Rise Amid US-Iran Disagreements Over Hormuz Strait

Oil prices climbed Tuesday as incompatible demands from the United States and Iran dimmed hopes for a swift resolution to the standoff at the Strait of Hormuz. Brent crude futures for October delivery rose 1.36% to $88.91 a barrel, surpassing $90 during trading. West Texas Intermediate for September delivery gained 1.30% to $83.20.

"The hope that the Strait of Hormuz will reopen soon is fading, as the United States has hardened its position by imposing negotiation conditions on Iran that block any agreement," explained Elias Haddad, an analyst at Brown Brothers Harriman. President Donald Trump stated Monday that the U.S. would demand "compensation" for attacks attributed to Iran over decades. This demand mirrors Iran's condition for any deal regarding the Strait of Hormuz: payment of reparations by the United States.

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The hope that the Strait of Hormuz will reopen soon is fading, as the United States has hardened its position by imposing negotiation conditions on Iran that block any agreement.

Tehran also insists that the U.S. must "definitively end the war and aggression" against Iran and its allies, including in Yemen and Iraq, and lift its blockade of Iranian ports. Nearly a fifth of global hydrocarbons normally transit this strategic maritime passage. However, oil prices showed signs of hesitation when Pakistan's Defense Minister told reporters that the U.S. and Iran were "closer to some kind of settlement," commented Neil Wilson of Saxo UK. Analysts at ING noted that the pattern repeats: initial enthusiasm for promising negotiations quickly evaporates when no progress is confirmed.

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closer to some kind of settlement