WASHINGTON (dpa-AFX) - Crude oil prices have surged on Friday, partially offsetting the slump seen in the previous session, as the U.S. and Iran remain unrelenting on their demands, leaving the Strait of Hormuz shut for shipping traffic.
WTI Crude Oil for September month delivery was last seen trading up by $1.05 (or 1.29%) at $82.30 per barrel.
Last week, after announcing that the U.S. is low-keying in dealing with Iran, U.S. President Donald Trump stated that he preferred to force Iran to concede to U.S. demands by exerting economic pressure rather than pursuing military offensives.
On Wednesday, Trump claimed through Truth Social that the U.S is in total control of the Strait of Hormuz.
Yesterday, strongly denying Trump's claims, Iran cautioned that the strait is under Iran's control and management. Iran announced that it will not reopen the strait until its demands, including reparation costs for the damages it suffered in the recent war, are met.
The standoff continues to keep the Strait of Hormuz closed for all shipping traffic in the gulf region.
In an interview with Newsmax, U.S. Treasury Secretary Scott Bessent remarked that the U.S. administration is planning to announce new measures to exert more financial pressure on Iran at an unprecedented level and thereby isolate Iran economically.
This is in stark contrast to what Bessent stated on August 4 that an agreement with Iran to reopen the strait was nearing.
Separately, U.S. Vice President JD Vance announced that apart from ensuring that Iran does not have any nuclear weapon anymore, the U.S. also wants to bring oil and gas prices at a much lower level for Americans.
On Thursday, U.S. Secretary of War Pete Hegseth stated that the U.S. military is well-prepared to enforce an indefinite naval blockade on Iranian ports, if required.
The risk-premium associated with a possible prolonged crude oil supply disruption has returned to markets.
Though the U.S. and Iran attacks have stopped, two tankers owned by the United Arab Emirates' national oil and gas company, Abu Dhabi National Oil Company, suffered drone attacks launched by Iran.
Meanwhile, crude oil prices continued to be impacted by Wednesday's reports from energy agencies that reflected a downwardly revised demand growth. While the IEA predicted a slump, OPEC forecast demand growth but slashed its outlook.
The shift comes following the views of economists that continued inflation due to crude oil prices could curb consumption globally. High prices could hold people back from spending liberally and restrict consumption.
Middle East tensions are also compounded by the spurt in attacks on vessels transiting the Red Sea by Houthi militants.
On Tuesday, the rebels struck a Saudi Arabia linked commercial vessel, Tihamah, in the Bab el-Mandeb Strait in the Red Sea.
Yesterday, the group announced targeting an Aramco refinery in Jarzan, Saudi Arabia.
A couple of days before, Pakistan stepped up its mediatory efforts and announced that it is working to bring the U.S. and Iran back to the negotiating table. However, there is still no visible sign of a breakthrough on a durable agreement between the warring nations to reopen the Strait of Hormuz.
Citing Kpler's data, Reuters reported that commodity vessel transits in the Hormuz region remained lower than the month's daily average of 12. Only a total of nine vessels passed through the strait as of Thursday. Through the Bab el-Mandeb Strait, 19 commodity vessels passed with their transponders on.
The U.S. dollar index was last seen trading at 99.67, down by 0.25 (or 0.25%) today.
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