(RTTNews) – Crude oil prices have surged on Tuesday, extending the gains from the two previous sessions as the U.S.-Iran stalemate over new demands for compensation for war-related damages continued, diminishing the expectations of an early reopening of the Strait of Hormuz.
WTI Crude Oil for September month delivery was last seen trading up by $0.89 (or 1.08%) at $83.02 per barrel.
Days before, after announcing that negotiations on sharing the authority to control the management of the shipping traffic across the Strait of Hormuz are in the final stages, Iran suddenly laid out a list of demands to the U.S.
Iran stated that the reopening of the Strait of Hormuz will depend only if the U.S. meets Iran’s conditions.
Foremost among them, Iran wanted a compensation for the widespread damages caused by the U.S. in the recent war.
Frustrated by Iran’s move, U.S. President Donald Trump responded through Truth Social by asking Iran to first compensate for all the deaths and damages to properties caused by Iran in many countries during several past conflicts all over the world over the last 50 years.
Trump also demanded Iran to pay for thousands of Iranians killed in the anti-government protests that happened months ago.
In addition, Trump directed the U.S. representatives to add this demand in all future talks with Iran.
Following these hardline stances by both the U.S. and Iran, experts are of the view that the distance between the nations widened further. Anxiety over further delay in the reopening of the strait for an indefinite period of time increased.
Yesterday, the geopolitical risk premium offered support to crude oil prices which jumped more than 5%.
Today, Bloomberg News reported Pakistan’s Defense Minister Khawaja Asif as stating that signals from the last two to three days indicate that the U.S. and Iran are close to reaching “some sort of an arrangement”. The report quoted Asif as optimistically stating that developments are shaking up in favor of peace.
Al Jazeera reported Qatar’s Foreign Ministry spokesman Majed al-Ansari as stating that the negotiations between Iran and Oman on the future management of shipping traffic across the Strait of Hormuz has reached an advanced stage.
The Interior Minister of Pakistan Syed Mohsin Raza Naqvi is in Iran for talks as a part of Pakistan’s mediatory efforts.
Expectations of a possible breakthrough in the ongoing efforts to end the U.S.-Iran conflict increased though investors watched these developments with cautious optimism.
Elsewhere in the Middle East, a commercial ship (Tihamah) transiting the Bab al-Mandeb Strait in the Red Sea came under attack by Houthi rebels, according to Yemen’s ruling government. The Houthis have not yet confirmed Yemen’s claims though.
According to a Reuters report that quoted shipping data from Kpler, on Monday, only six commodity vessels transited the Strait of Hormuz in either direction, down from 11 ships in the latest 10-day average.
At Bab el-Mandeb, traffic remained unchanged on Monday compared to the 10-day average of around 24 vessel transits.
In Europe, Ukraine stepped up its launches against Russia.
After conducting a drone attack on Tatneft’s Taneco Refinery of Russia earlier this week, Ukraine’s military claimed another drone strike on Orsknefteorgsintez oil refinery in Orsk in the Orenburg region in the early hours of Tuesday.
The U.S. dollar index was last seen trading at 99.84, up by 0.07 (or 0.07%) today.
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