Oil prices rose on Monday on uncertainty over the reopening of the Strait of Hormuz anytime soon, as Iran said a deal with Oman defining new shipping lanes was in its final stages but insisted the U.S. must still meet other conditions.
Brent crude futures rose 91 cents or 1.09%, to $84.46 a barrel by 0056 GMT, while U.S. West Texas Intermediate crude futures rose 61 cents, or 0.78% to $78.79 a barrel.
Both benchmarks had fallen more than 7% last week on hopes that Iran and Oman were close to reaching a deal that would result in a reopening of the Strait of Hormuz, which carried a fifth of the world’s oil before the war.
While Iran said on Sunday that a deal with Oman was in its “final stages”, it reiterated that the waterway would only reopen once Washington met other conditions, including U.S. compensation to Iran for its widespread attacks.
“Traders have been conditioned by the on-again, off-again nature of the negotiations and are waiting for tangible evidence, such as verified tanker movements or formal agreements, before further unwinding the risk premium,” said Tim Waterer, chief market analyst at KCM Trade.
Iran and the U.S. are not engaged in talks and Tehran will not start them as long as Washington breaches an interim deal signed in June, Iranian Foreign Minister Abbas Araqchi said on Sunday.
In a further threat to supply, a Saudi oil plant was attacked over the weekend.
The Iran-aligned Houthis said they had hit Saudi Aramco’s Jazan refinery on Sunday, two days after the kingdom signed a defence pact with Sunni Muslim allies Turkey and Pakistan in response to growing regional instability from the U.S.-Israeli war on Shi’ite Iran.
Separately, the United Arab Emirates’ ADNOC said on Friday that 15 of its vessels had been attacked transiting the Strait of Hormuz since the beginning of the conflict.
(Reporting by Helen Clark; Editing by Nick Zieminski and Sonali Paul)