U.S. oil rises above $83 a barrel as Iran says Strait of Hormuz won't open until conditions are met
U.S. oil had risen as much as 3% earlier in the day after President Donald Trump demanded that Iran pay reparations to the U.S.
Lynk
Oil prices rose Tuesday after a senior Iranian official said the Strait of Hormuz will not reopen until Tehran's conditions are met by Washington.
U.S. West Texas Intermediate futures gained 1.3% to close at $83.20 per barrel. Brent crude, the international benchmark, advanced 1.36% to settle at $88.91 per barrel. Prices have gained more than 6% this week as hopes fade for a deal to increase ship traffic through Hormuz.
The Secretary of Iran's Supreme National Security Council, Mohsen Rezaei, demanded the U.S. unfreeze Iranian funds held overseas as condition for Hormuz to open, according to Reuters.
The oil market was weighing conflicting signals Tuesday about whether the U.S. and Iran were on the verge of a deal.
Pakistan's Defense Minister Khawaja Asif told Bloomberg News that "things are shaping up again in favor of a peace arrangement or a deal." Islamabad mediated the interim U.S.-Iran deal in June that quickly collapsed and led to renewed fighting in Hormuz.
Oil prices moved sharply higher on Tuesday
President Donald Trump has escalated his rhetoric this week, demanding that Iran pay reparations to the U.S. One week ago, Treasury Secretary Scott Bessent told CNBC that a new deal on Hormuz could come soon, but an agreement still has not materialized.
Ship transits through Hormuz remained very low on Monday with just eight vessels crossing the the strait, according to data from the trade intelligence firm Kpler. More than 130 ships crossed Hormuz before the U.S. and Israel attacked on Feb. 28.
Energy Secretary Chris Wright said Tuesday that oil exports through Hormuz have reached a seven-day moving average of 9 million barrels per day thanks to the U.S. military. The total oil flows from the Gulf region are averaging around 15 million bpd when pipeline exports are included, Wright said.
Meanwhile, Trump on Monday extended the suspension of a shipping law, the Jones Act, that restricts the transport of goods between American ports to U.S. vessels. He narrowed the waiver to vessels hauling certain energy resources.
Oil stockpiles in the U.S. Strategic Petroleum Reserve have fallen below 300 million barrels to the lowest level in more than four decades, according to Deparment of Energy data released Monday. Trump ordered the release of 172 million barrels in March to ease the disruption caused by the Iran war.
