Oil prices rose by more than 2% on Monday after Iran announced that it would not soften its conditions for reopening the Strait of Hormuz. This decision came after Donald Trump, the President of the United States, rejected Tehran's proposal, increasing uncertainty about when oil traffic would return to normal in this vital route.
Details of Oil Prices
At 04:31 Eastern Time (08:31 GMT), Brent crude futures expiring in November rose by 2.7% to $107.08 per barrel. Additionally, West Texas Intermediate (WTI) crude futures increased by 2.4% to $94.66 per barrel. Brent oil prices have risen about 18% this month.
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Iran's Conditions for Reopening the Strait of Hormuz
Iran's proposal was to reopen the Strait of Hormuz within seven days while broader negotiations are resumed, provided that Washington lifts its maritime blockade, reduces military pressure, removes sanctions on Iranian oil sales, and agrees to a ceasefire. Iran has stated that it will remain committed to these conditions, despite Trump's rejection of the proposal.
Trump has also stated that he expects negotiations with Iran to resume this week. Qatar is mediating between the two sides to revive the talks.
Impacts on Oil Traffic and Supply Security
The Strait of Hormuz, through which about one-fifth of global oil and liquefied natural gas supply passes, has seen a sharp decline in transportation activities. Additionally, Iranian-backed Houthi forces in Yemen have increased their attacks on Saudi Arabia and commercial fleets in the Red Sea.
Saudi Arabia announced on Saturday that it intercepted two ballistic missiles and two drones launched by the Houthis. These disruptions have forced Gulf producers to seek alternative methods for transporting oil.
However, there are signs that some oil is still passing through the Strait of Hormuz. Trump stated that over 20 million barrels of oil passed through the strait over the weekend.
The market is also closely monitoring the supply of refined products. Diesel prices in Europe and the United States have reached their highest levels as disruptions in oil and product exports from the Middle East and Russia have tightened fuel markets.
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