Oil Prices Crude holds above one-week high as US-Iran talks lose momentum

Oil prices held steady on Tuesday near their highest level in more than a week. Investors grew less hopeful about a US-Iran deal to end the war and reopen the Strait of Hormuz.

Brent crude futures were flat at $87.81 a barrel by 0013 GMT. US West Texas Intermediate (WTI) crude also held at $82.20 a barrel.

Both benchmarks gained more than 5% on Monday. They reached their highest levels since July 31 after US President Donald Trump rejected Iran’s conditions for a peace agreement.

Trump demanded compensation from Iran for people killed in wars, attacks and protests. The demand could further complicate efforts to reopen the Strait of Hormuz.

Later, Trump said the United States had control of the strategic waterway. He also claimed that US forces had cleared the strait of Iranian mines.

“There appears to be a gulf, no pun intended, between the US and Iran over what any agreement would actually look like,” said Tim Waterer, chief market analyst at KCM Trade.

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He added that fading optimism had pushed oil prices higher as traders reassessed the prospects for a deal.

Strait of Hormuz keeps markets on edge

Shipping risks remain high around the Strait of Hormuz and the Bab el-Mandeb. Any restrictions or further attacks could increase insurance costs and force vessels to take longer routes.

“Energy flows look likely to stay constrained near term,” Waterer said.

Meanwhile, Saudi Aramco has delayed the restart of its Jazan refinery until August 30. The refinery has a capacity of 400,000 barrels per day.

The delay followed claims by Yemen’s Houthi movement that it attacked the facility twice on Sunday.

Barclays analysts said crude oil and refined product exports through the Strait of Hormuz averaged 3 million barrels per day in the week ending August 7.

That figure fell from 4.4 million barrels per day in the previous week.

Iraq raises Basra crude price

Elsewhere, Iraq raised the September official selling price for Basra Medium crude to Asian buyers by $2.50.

The new price stands at $4 a barrel below the average of Oman and Dubai quotations.

Market participants will continue to watch developments around the Strait of Hormuz and US-Iran negotiations for signals about the direction of oil prices.