Oil prices held near $100 a barrel as traders weighed the prospect of an Iran-Oman arrangement to manage shipping through the Strait of Hormuz against renewed buying by China and continued risks to regional energy supplies.
Brent crude has gained 1.6% over the past two sessions, while West Texas Intermediate was trading above $92. Brent briefly moved above $98 on Monday as escalating US-Iran tensions pushed the benchmark to its highest level in nearly six weeks.
Iran said negotiations with Oman are in their final stages, while the two countries had already agreed on a framework for a temporary navigational corridor in August. The framework also includes plans for mine clearance and further talks on a permanent navigation arrangement.
However, the proposed corridor does not necessarily mean a full reopening of the waterway. Iran has previously insisted that vessels using the route would remain subject to its approval and surveillance.
ALSO READ: Stock Market Today: All You Need To Know Before Going Into Trade On Sept 8
China Buying Adds To Oil Price Pressure
A second source of support for crude is stronger Chinese buying. Chinese refiners have increased purchases of crude from suppliers including Africa, Canada and Latin America, tightening premiums for barrels outside the Middle East.
The buying comes even as China's overall seaborne crude imports remain well below pre-conflict levels, suggesting that refiners may be seeking to secure alternative supplies amid uncertainty around Middle Eastern flows rather than signalling a broad-based acceleration in demand.
Brent has risen more than 30% since the conflict began, although it remains well below the roughly $126 peak reached earlier in the year. Refined products, particularly diesel, have seen even sharper gains as disruptions from the Middle East combine with tightness linked to the Russia-Ukraine war.
Despite the risks, some oil continues to move through Hormuz. Macquarie estimates roughly 7 million barrels a day of crude and refined products are currently crossing the strait, versus about 20 million barrels a day before the war.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
