Oil steady as Iran tempers hopes of swift Hormuz reopening

LONDON: Oil prices were little changed on Monday as optimism over talks to reopen the Strait of Hormuz was tempered by Iran’s insistence that the United States must satisfy several demands before the waterway could reopen.

Brent crude futures stood at $83.74 a barrel, up 19 cents, by 0807 GMT.

US West Texas Intermediate crude futures were up 3 cents at $78.21.

Both benchmarks fell 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 and liquefied natural gas before the Middle East conflict that began at the end of February.

Iran said on Sunday that a deal with Oman was in its final stages, but it reiterated that the waterway would only reopen once Washington met other conditions, including US compensation for widespread US attacks on Iran.

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.

Meanwhile, in a further threat to supply, the Iran-aligned Houthis said they had struck Saudi Aramco’s Jazan refinery on Sunday.

The attack was two days after the kingdom signed a defence pact with Sunni Muslim allies Turkiye and Pakistan in response to growing regional instability from the US-Israeli war on Shia Iran.

Separately, UAE oil company ADNOC said on Friday that 15 of its vessels had been attacked transiting the Strait of Hormuz since the beginning of the conflict.

“Any major progress towards restoring unrestricted shipping could exert downward pressure on oil prices, while a breakdown in negotiations or renewed supply disruptions could quickly revive the geopolitical risk premium,” said Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm.