- Oil prices rose on Aug 10 amid uncertainty over reopening the Strait of Hormuz
- Brent crude increased 1.09% to $84.46 and WTI rose 0.78% to $78.79 per barrel
- Iran said a deal with Oman on shipping lanes was near but US must meet conditions
Oil Prices On Aug. 10: International crude oil prices rose on Monday, Aug. 10 on uncertainty over the reopening of the Strait of Hormuz soon, as Iran said a deal with Oman defining new shipping lanes was in its final stages but insisted the US must still meet other conditions. Traders continue to assess mixed signals amid worries that a deal to open the Strait of Hormuz may not be anytime soon.
Brent crude futures rose 91 cents or 1.09%, to $84.46 per barrel, while US 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 US compensation to Iran for its widespread attacks. Iran and the US 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 US-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.
Iranian Foreign Minister Abbas Araghchi said that Tehran is not currently in direct talks with the U.S. to end the war with Iran and open the Strait of Hormuz, while Washington earlier asserted that a deal is near.
In addition, Iran has asked the U.S. for compensation as a condition to reopen the crucial waterway, according to a report by media outlet Independent. The Strait of Hormuz will remain shut until the U.S. meets six conditions, including ending the war and aggression against Iran and its allies, Mohammad Bagher Zolghadr, the head of Iran's supreme national security council, reportedly said.
However, the U.S. maintains that any reopening must preserve unrestricted freedom of navigation without Iranian approvals, tolls, or controls, disputing key elements of the reported arranged, according to Citi. "Risks remain elevated outside Hormuz too, with Houthi groups in Yemen continuing attacks and threats against Saudi-linked shipping in the Red Sea and around Bab el Mandeb," it added.
"Uncertainty remains high as we go into the sixth month of the Iran war," Westpac said in a note. "The Strait of Hormuz remains effectively closed and the entry of the Yemen Houthis into the fray is interrupting alternative Red Sea supply routes," it added.
"As of Aug. 9, CENTCOM has redirected 55 commercial vessels, disabled 2, and boarded 2 to ensure compliance," according to a post on X by U.S. Central Command.
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