NEW YORK: Oil prices edged up to a one-week high on Tuesday as doubts about a potential US-Iran peace deal fuelled concerns that Middle East supply disruptions would persist.
Brent futures rose USD 1.19, or 1.4 percent, to settle at USD 88.91 a barrel, while US West Texas Intermediate (WTI) crude rose USD 1.07, or 1.3 percent, to settle at USD 83.20. Those were the highest closes for both crude benchmarks since July 31 for a second day in a row after both contracts jumped about 5 percent on Monday as hopes for a peace deal between the US and Iran started to fade.
The Strait of Hormuz will remain closed as long as the US does not change its behavior and accept Iran’s conditions to end the war, the newly appointed secretary of Iran’s Supreme National Security Council, Mohsen Rezaei, said on Tuesday.
READ MORE: Oil prices hold near one-week high as Hormuz talks advance
About 20 percent of global oil supply passed through the strait before the start of the Iran war on February 28. His comments are the strongest indication so far that any deal in talks with Oman over the waterway would not immediately reopen it to shipping if the US does not also abide by its commitments in a memorandum of understanding toward ending the conflict reached between Washington and Tehran in June.
Shipping data showed that traffic through the Strait of Hormuz dropped to six vessels on Monday, compared with a 10-day average of about 11 vessels.
Before the war, daily traffic through the waterway averaged between 125 and 140 vessels a day.
Elsewhere in the Middle East, Yemen’s Iran-aligned Houthis attacked a Saudi ship carrying military equipment in Bab el-Mandeb, between the Red Sea and the open Indian Ocean, Houthi-run news agency Saba reported, while sources reported a missile attack on a container ship off Pakistan in a suspected US strike.
Some producers in the Middle East are likely to struggle to restore oil output to pre-conflict levels by the end of 2027, even if trade patterns return to normal by early next year, the US Energy Information Administration said on Tuesday.
Supply disruption in Libya
In Libya, renewed violence in the strategic city of Zawiya has disrupted the oil industry, with state oil firm the National Oil Corporation saying it could declare force majeure if drone attacks on energy assets in the city continued. Libya is a member of OPEC.
The Abu Dhabi National Oil Company is offering spot crude in a tender, its eighth issued since the start of June as the UAE state oil company works to move oil from inside the Strait of Hormuz, trade sources said. In Europe, the Ukrainian military said on Tuesday it attacked an oil refinery in the Russian city of Orsk, the second-largest city in the Orenburg region and an important industrial hub.
The combination of Ukraine’s attacks on Russian energy infrastructure and the Iran war has limited global supplies and boosted global energy prices — Brent futures are up about 44 percent so far this year.
Russia was the world’s third-biggest crude oil producer behind the US and Saudi Arabia in 2025, according to US energy data, and is a member of the OPEC+ group of countries, which includes OPEC and allies.
US oil inventories
The oil market was waiting for weekly storage reports from the American Petroleum Institute trade group later on Tuesday and the US Energy Information Administration on Wednesday.
Analysts estimated energy firms pulled 0.5 million barrels of crude from storage during the week ended August 7.
If correct, it would be the second time stockpiles had declined in three weeks. Stockpiles increased by 3.0 million barrels in the same week last year and have increased by an average of 3.1 million barrels over the past five years (2021 to 2025).
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