Brent tops $85/bbl as Iran sets conditions for Hormuz reopening

Oil prices rose nearly 2% on Monday after Iran said it was close to reaching an agreement with Oman on new shipping lanes through the Strait of Hormuz. However, Tehran said the waterway could reopen only after the United States meets several conditions, including compensation, an end to sanctions, and the removal of military threats.

On Friday, October Brent settled $1.06 higher at $83.55/bbl, while September WTI gained 89 cents to $78.18/bbl. At the time of writing, October Brent was trading at $85.26/bbl, up $1.71, or 2.05%, from Friday’s close. September WTI stood at $79.61/bbl, up $1.43, or 1.83%.

Oil benchmarks had fallen more than 7% last week amid expectations that Iran and Oman were nearing an agreement to reopen the Strait of Hormuz. Before the conflict began earlier this year, around one-fifth of global oil and LNG shipments passed through the strategic waterway. Renewed uncertainty over the timing and conditions of a reopening has since encouraged traders to rebuild the geopolitical risk premium.

Additional support came from regional security concerns. Yemen’s Iran-backed Houthis claimed on Sunday that they had attacked Saudi Aramco’s Jazan refinery. Meanwhile, ADNOC said last week that 15 of its vessels had come under attack while transiting the Strait of Hormuz since the conflict began.

Market participants continue to closely monitor the negotiations. Meaningful progress toward restoring unrestricted shipping could put downward pressure on crude prices, while setbacks in talks or fresh supply disruptions could lead to further gains.

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