- Oil prices held gains as Trump raised demands for US compensation from Iran in talks
- Brent crude near $88 and WTI around $82 amid uncertainty over Strait of Hormuz reopening
- Iran seeks reparations and lifting of US blockade to restore shipping through Hormuz
Oil held on to a four-day advance as fresh demands from US President Donald Trump raised doubts over the prospects of a deal that could restore traffic through the Strait of Hormuz.
Brent crude traded near $88 a barrel after surging almost 5% in the previous session, while West Texas Intermediate hovered around $82. Trump said Iran would have to compensate the US for people it has killed in conflicts, adding that the demand would be put "firmly into any, and all, future negotiations."
The comments add another hurdle to talks between Washington and Tehran over the conflict and the reopening of Hormuz. Iran has sought reparations and an end to the US blockade as conditions for an agreement with Oman that could restore shipping through the waterway. Visible traffic through the strait remains at a trickle.
Around one-fifth of global oil and liquefied natural gas shipments passed through Hormuz before the war, making the waterway a key pressure point for energy markets. Any delay in restoring regular shipping is keeping traders focused on supply risks.
The wider conflict is also affecting fuel markets. The Middle East war has disrupted refinery operations and diesel supplies, while the Russia-Ukraine conflict continues to add pressure to energy infrastructure. European diesel futures jumped 9% on Monday, marking their biggest gain since early July.
Shipping risks have also spread into the Red Sea. Iran-backed Houthi militants have threatened vessels and energy infrastructure, while Saudi Aramco has pushed back the restart of its Jazan refinery to late August following an attack claimed by the group, according to IIR Energy.
Trump said compensation for Iran had never featured in negotiations, while a June memorandum between Tehran and Washington had outlined a potential $300 billion fund for Iran's post-war rehabilitation and economic development.
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