Crude Oil Prices Rise Amid Strait of Hormuz Tensions

Crude oil prices settled higher on Tuesday, boosted by concerns over supply disruptions in the Middle East. The September WTI crude oil contract closed up +1.07 (+1.30%) at $83.50 per barrel.

The Strait of Hormuz, a critical waterway for global oil supplies, remains shut due to tensions between Iran and Oman. Iranian state media reported that the strait would remain closed until all conditions are met, limiting crude exports from the region.

However, Pakistan's defense minister Khawaja Asif said on Tuesday that talks between Oman and Iran have reached an advanced stage, suggesting a potential agreement to reopen the strait could be imminent. This raised concerns among traders that a deal may soon be reached, which could alleviate supply disruptions and put downward pressure on oil prices.

Crude prices also received support from Ukraine's intensifying drone attacks on Russian oil infrastructure. The strikes have damaged refineries, oil tankers, and major pipeline infrastructure, reducing Russia's crude-processing rates to a 24-year low of 3.51 million barrels per day in July.