Brent Crude Nears $85 as Iran-Oman Deal Remains Elusive
Crude oil prices continued to rise on Monday, August 10, as tensions in the Middle East remain high. Brent crude is trading near $85 a barrel, having increased by over 5% in the last three sessions.
The increase comes amidst ongoing efforts to reach an agreement between Iran and Oman regarding the management of the Strait of Hormuz. However, Iran's foreign minister Abbas Araghchi stated that any deal would not immediately restore normalcy to the waterway.
Saudi Aramco CEO Amin Nasser also echoed this sentiment, noting that it could take at least 18 months for production and supply to return to pre-war levels even if tensions were to subside today.
Recent attacks on Saudi Aramco's Jazan refinery by the Iran-backed Houthis of Yemen and another tanker operated by Abu Dhabi National Oil Company (ADNOC) in the Strait of Hormuz have added to the uncertainty. Despite this, traders remain bullish, with some analysts attributing the market's response to the perceived possibility of disruption rather than the certainty of normalization.
Until actual flows normalize, geopolitical risk continues to support crude prices, according to Haris Khurshid, chief investment officer at Karobaar Capital LP.