WASHINGTON (dpa-AFX) - Adding to the two previous sessions of gains, crude oil prices have edged higher on Tuesday as expectations of U.S.-Iran talks over the Strait of Hormuz reopening faded after U.S. President Donald Trump announced that no negotiations with Iran are underway and none are scheduled either. With both the U.S. and Iran asserting control over Strait of Hormuz, shipping traffic has fallen drastically, rekindling supply concerns.
WTI Crude Oil for September month delivery was last seen trading up by $0.39 (or 0.46%) at $84.89 per barrel.
The U.S. and Iran agreed to halt their mutual attacks, which began in late February, for a 60-day period and signed a Memorandum of Understanding on June 17, consenting to find ways to resolve their hostilities through peace talks.
With Iran asserting authority over the Strait of Hormuz which the U.S. refused to concede, the truce collapsed.
Despite exchange of attacks by both sides, negotiators from the U.S. and regional intermediaries carried on efforts to end their hostilities.
Meanwhile, the MoU expired yesterday.
Iran's Foreign Minister Abbas Araghchi stated through a post via Telegram that Iran is yet to make a decision to recommence negotiations with the U.S. Tehran already stated that Iran and Oman were close to signing a deal on managing the Strait of Hormuz.
Last Friday, the U.S. escalated the rhetoric with U.S. President Donald Trump stating that the U.S. is planning to claim the waterway for the U.S.
Yesterday, Trump stated that Iran wants to make a deal with the U.S. but is not making the one he thought was necessary for the U.S.
Later in an interview with Fox News, claiming that the U.S. administration is engaged in direct backchannel negotiations with Iran's Islamic Revolutionary Guards Corps, Trump warned of bombing Oman if it gets in the way of the U.S.-Iran talks. Trump also demanded that Iran should put up the white flag of surrender.
Compounding the tensions, today through Truth Social, Trump posted a map of the Hormuz region showing the crucial seaway as 'NEW US territory.'
Suddenly reversing his previous stance, through the same platform, Trump categorically stated that no talks or conversations are going on with Iran and asserted that none are scheduled.
Further, Trump added that the U.S. naval blockade on Iran is in full force and effect and that the Strait of Hormuz is open and operative.
Iran's state media reported the nation's top negotiator Mohammad Bagher Ghalibaf as stating that the strait will remain closed until the U.S. meets the conditions agreed in the interim deal.
With conflicting claims over the Strait of Hormuz, the daily shipping traffic has reduced to single digits.
On Monday, citing data from maritime tracking and analytics firm Kpler, Reuters reported that only six vessels passed through the Strait of Hormuz with three entering the Persian Gulf and three exiting. On Saturday, three vessels navigated the critical chokepoint, and on Sunday, only two passed through the strait.
Meanwhile, without revealing full details, the United Kingdom Maritime Trade Operations center announced that a vessel was struck by an 'unknown projectile' while moving out of the Strait of Hormuz.
Yesterday, quoting the International Energy Agency's monthly oil market report, Reuters reported that after recovering from the closure of the Strait of Hormuz, crude oil will move into a significant surplus in 2027. These numbers exerted downside pressure on crude oil prices.
According to the agency, the conflict blocked nearly 14 million barrels per day of oil output from the Middle East. While supply could surge by 8 million bpd, demand is set to rise by only 2 million bpd.
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