Hormuz Deal Fails to Restore Oil Flows, Prices Remain Volatile

WTI and Brent oil prices have been volatile since July 23 due to a deal that has not yet been signed, which would restore flows through the Hormuz route.

Iran and Oman are close to agreeing on coordinates for the route, but Tehran wants control over who enters and leaves the area. This is seen as a managed chokepoint rather than an actual reopening of the route.

The physical market is tighter than the futures price suggests, with only 80 million barrels remaining stored in the Gulf. Prompt Brent is in backwardation, and diesel margins are running 50% above mid-June levels after Russian refinery damage reduced supply.