(RTTNews) – Rebounding from three straight sessions of losses, crude oil prices have soared on Wednesday as the Strait of Hormuz is yet to reopen despite mediatory efforts by Pakistan and Qatar to end the U.S.-Iran war. Investors also await U.S. moves after Iran and Oman reached an agreement to create a temporary corridor in the critical waterway.
WTI Crude Oil for October month delivery was last seen trading up by $1.35 (or 1.64%) at $83.58 per barrel.
On Tuesday, Iran’s Deputy Foreign Minister Kazem Gharibabadi stated that Iran edged closer to an agreement with Oman to jointly establish a temporary maritime route for ships travelling through the Strait of Hormuz.
Oman’s Foreign Minister Badr bin Hamad Al Busaidi echoed the same views and stated that a phased framework has been agreed upon for the future management of the strait.
However, Gharibabadi warned that the seaway will not fully reopen until the U.S. fulfills its commitments.
Yesterday, Iran’s Islamic Revolutionary Guards Corps stated that Iran and Oman have also agreed on a mechanism to share revenue from the strait.
The IRGC also asserted that full reopening of the Strait of Hormuz would happen only if the U.S. administration honors the June 17 Memorandum of Understanding that now stands suspended after both sides renewed their attacks less than a week after signing the truce.
Contradicting Iran’s claims, in an interview with conservative radio host Glenn Beck, U.S. President Donald Trump stated that the Strait of Hormuz is functioning and the U.S. is in charge.
Today, Reuters quoted Kpler’s data as showing that the visible commodity vessel transits at Hormuz totaled 10, up slightly from eight on Tuesday.
Through another key waterway, the Bab el-Mandeb Strait, a total of 19 commodity vessels passed through, according to Kpler.
Earlier today, the U.K. Maritime Trade Operations agency stated that a tanker was hit by an unknown projectile transiting the Strait of Hormuz.
Yesterday, Bloomberg reported that satellite imagery showed seven tankers collecting Iraqi cargo with a combined carrying capacity of roughly 13 million barrels.
Meanwhile today, Qatar’s Prime Minister Sheikh Mohammed bin Abdulrahman al-Thani arrived in Iran to meet the senior leaders. Their meeting raised expectations for a fresh dialogue process between the U.S. and Iran to end the war.
Iran’s Foreign Ministry spokesman Esmaeil Baghaei stated that the discussions would focus on Qatar’s mediatory role to ease tensions between the U.S. and Iran as well as on the latest developments in and around Hormuz.
On Monday, Pakistan’s Army Chief Field Marshal Syed Asim Munir and Interior Minister Mohsin Naqvi held extensive talks in Iran. Later, Naqvi stated that the meeting concluded on a highly positive note with significant progress made.
The U.S. administration shifted its stance from aggressive military measures against Iran to pressuring the nation economically by cutting off all possible funding channels.
The U.S. blockade, termed “Operation Economic Outcast,” unveiled on Monday targeted Iran’s oil industry revenues as well as other key sectors.
The U.S.-Iran conflict is entering its seventh month. With no clear cut signal emanating on a resumption of shipping across the strait, oil prices moved to the upside due to the ongoing supply concerns.
Experts are optimistic on the efforts by Pakistan and Qatar to bring the U.S. and Iran back to negotiating table.
As several previous efforts to de-escalate U.S-Iran tensions and secure the reopening of the Strait of Hormuz broke down in very short order, the geopolitical risk premium remains attached to crude oil.
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