Global oil prices remained largely steady on Tuesday near their highest level in more than a week as uncertainty over a possible ceasefire agreement between the United States and Iran continued to weigh on market sentiment. Brent crude futures were little changed at $87.81 per barrel by 0013 GMT, while US West Texas Intermediate (WTI) crude futures stood at $82.20 per barrel. Both international benchmarks had climbed more than 5% during Monday’s trading session, reaching their highest levels since July 31. The sharp increase came after US President Donald Trump issued fresh demands in response to Iran’s conditions for a potential peace agreement, raising concerns that diplomatic efforts to end the conflict could face further obstacles. Trump has demanded compensation from Iran for deaths and damage linked to wars, attacks and protests, a position that analysts say could make negotiations more difficult. His comments have also increased uncertainty over the future of the Strait of Hormuz, one of the world’s most important oil shipping routes. Later, Trump said the United States was in control of the strategic waterway and had carried out operations to clear Iranian mines from the strait. The remarks added to concerns among energy traders about the security of commercial shipping in the region. “There appears to be a gulf, no pun intended, between the U.S. and Iran over what any agreement would actually look like,” said Tim Waterer, chief market analyst at KCM Trade. According to Waterer, the lack of progress has caused some of the optimism that had supported oil prices in the previous week to fade. The possibility of prolonged disruption to crude shipments has instead provided additional support to prices. Hormuz and Bab el-Mandeb Remain Key Risks The Strait of Hormuz remains a major focus for global energy markets because of its importance to international crude and petroleum-product shipments. Any prolonged disruption in the waterway could tighten global supplies and push up transportation and insurance costs. Market concerns have also extended to the Bab el-Mandeb, another critical maritime route connecting the Red Sea with the Gulf of Aden. Waterer said the risks surrounding both waterways remained significant, warning that even temporary restrictions or the threat of further attacks could raise insurance premiums and force shipping companies to take longer routes. Such disruptions could reduce the volume of energy supplies reaching international markets in the near term, adding further volatility to crude prices. Data cited by Barclays showed that crude oil and refined petroleum product net exports through the Strait of Hormuz averaged around 3 million barrels per day in the week ending August 7. That was significantly below the 4.4 million barrels per day recorded during the previous week. The decline highlights the potential impact of regional security risks on energy flows and has heightened concerns about supply availability if disruptions continue. Jazan Refinery Restart Delayed Supply concerns were also reinforced by developments in Saudi Arabia, where state oil giant Saudi Aramco has postponed the restart of its Jazan refinery. The refinery, which has a processing capacity of around 400,000 barrels per day, is now expected to resume operations on August 30 after the Iran-aligned Houthis claimed responsibility for two attacks on the facility on Sunday. The delay could further complicate regional fuel supply conditions at a time when traders are already closely monitoring disruptions to shipping routes. Iraq Raises Basra Medium Price Meanwhile, Iraq has increased the official selling price for its Basra Medium crude for Asian buyers for September. The price was raised by $2.50 to a discount of $4 per barrel against the average of Oman and Dubai crude benchmarks. The adjustment comes as Asian refiners and international traders continue to assess supply risks arising from tensions in the Middle East. With diplomatic uncertainty between Washington and Tehran, disruptions around major shipping routes and refinery-related setbacks continuing to influence the market, oil prices are likely to remain sensitive to developments in the region.
