Global oil markets remained under pressure as Brent crude held above $87 per barrel after posting a more than 5% surge on Monday, its strongest gain since July 31. The rally followed growing skepticism over a potential US-Iran peace agreement, with negotiations appearing to stall after US President Donald Trump demanded compensation from Iran for losses suffered by the United States in past conflicts and attacks. The tougher US position has reduced expectations for a near-term reopening of the Strait of Hormuz, one of the world’s most critical energy transit routes.
Trump also stated that the US Navy had secured control of the Strait of Hormuz and cleared the strategic waterway of Iranian naval mines. Despite these assurances, markets remain focused on the absence of a political breakthrough, with analysts warning that uncertainty surrounding the negotiations continues to support higher oil prices.
Will Shipping Disruptions Keep Global Energy Markets on Edge?
Supply concerns have also intensified following reports that Saudi Aramco delayed the restart of its 400,000-barrel-per-day Jazan refinery until August 30 after Houthi attacks reportedly targeted the facility. At the same time, shipping through the Strait of Hormuz remains well below normal levels, with Barclays estimating that crude oil and refined product exports fell to 3 million barrels per day during the week ending August 7, compared with 4.4 million barrels per day a week earlier.
Analysts warn that continued security risks around both the Strait of Hormuz and the Bab el-Mandeb are likely to keep shipping costs elevated, disrupt supply chains, and maintain upward pressure on global energy prices. Adding to the bullish sentiment, Iraq increased the September official selling price for its Basra Medium crude exports to Asia, reflecting expectations of tighter regional supplies.