Brent Crude Rises 1.09% to $84.46 Amid Iran-U.S. Strait Deal Uncertainty
Key Points
- Brent crude for October delivery gained 1.09% to $84.46 per barrel on Monday, while U.S. West Texas Intermediate futures for September advanced 0.84% to $78.84.
- Iranian Foreign Minister Abbas Araghchi said Tehran is not currently in direct talks with the U.S. to end the war and open the Strait of Hormuz, contradicting U.S. assertions that a deal is near.
- Iran's supreme national security council head Mohammad Bagher Zolghadr said the Strait will remain shut until the U.S. meets six conditions, including ending aggression against Iran and its allies.
Additional pressures on crude supplies extend beyond the Strait, with Houthi groups in Yemen continuing attacks and threats against Saudi-linked shipping in the Red Sea and around Bab el Mandeb. U.S. Central Command reported that as of August 9, it had redirected 55 commercial vessels, disabled 2, and boarded 2 to ensure compliance with security measures in the region.
Westpac noted in a market analysis that uncertainty remains high in the sixth month of the Iran conflict, with the Strait of Hormuz effectively closed and the entry of Yemeni Houthi groups interrupting alternative Red Sea supply routes. The combination of these factors—diplomatic stalemate, military tensions, and alternative shipping disruptions—sustains upward pressure on crude prices as traders price in extended supply constraints. With Iran demanding U.S. concessions the American government shows no indication of accepting, and with regional proxies continuing attacks on shipping, crude markets face sustained volatility until either diplomatic progress emerges or alternative supply routes stabilize significantly.
Market Outlook
Oil prices likely remain supported above $78 per barrel for WTI through the near term given the Strait closure shows no imminent resolution. If Iran-U.S. negotiations remain stalled beyond the next 60 days, upside pressure toward $85-90 Brent becomes possible as market participants price extended supply uncertainty and continued Houthi disruptions to Red Sea routes.
Sources: CNBC and other international news outlets.
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