Oil prices edged higher on Monday as negotiations between Iran and Oman over managing traffic through the Strait of Hormuz remained unresolved, with Tehran attaching fresh conditions that clouded hopes for an imminent deal to reopen the vital waterway.
Brent crude for October delivery rose more than 1% to $84.11 a barrel by 0730 GMT, adding to gains after a volatile week in which the contract had briefly dipped below $80 on optimism over a breakthrough. Prices are now up roughly 16% since the start of the U.S.-Israel military campaign against Iran in late February, according to Al Jazeera.
The strait, which normally carried about 130 vessel transits a day before the conflict and accounts for roughly one-fifth of global oil supply, has seen traffic collapse to as few as eight to 15 crossings a day since early August, in what analysts describe as the largest disruption to energy shipping in recorded history. Since the war began, the region has recorded at least 64 violent incidents and 17 deaths involving commercial vessels.
Iran ties reopening to US concessions
Iranian Foreign Minister Abbas Araghchi said reopening the strait to normal traffic hinges on Washington easing sanctions on Tehran and paying war reparations, conditions that have stalled a deal even as officials describe negotiations with Oman as being in their "final stages." Iran's foreign ministry spokesman, Esmaeil Baghaei, said talks with Muscat were "forward-moving," though he cautioned that progress depended on "certain third parties" not obstructing the process, an apparent reference to Washington.
President Trump has threatened that Iran would be "hit very hard" if no agreement materializes, while a Gulf official has said Tehran warned it would retaliate by striking Gulf energy facilities and other regional targets if the U.S. attacks Iranian infrastructure, according to OilPrice.com. Under the terms reportedly being discussed, Iran would gain a degree of control over vessel traffic entering, and potentially exiting, the waterway, a concession the U.S. has so far not opposed.
"The lack of concrete movement ... is keeping a risk premium in the price," KCM Trade's chief market analyst said, capturing the market's wait-and-see posture as traders weigh the odds that a finalized text emerges this week against the risk that talks collapse again.
For now, the standoff continues to underpin oil prices even as broader financial markets rally on hopes for lower U.S. interest rates, leaving energy traders focused less on Federal Reserve policy than on whether Tehran and Washington can bridge the remaining gaps over sanctions relief and reparations.
