Hormuz Hopes Fizzle Oil Rally as Trump Demands Iran Reparations
Oil prices retreated on Tuesday after reaching their highest since July 31 as traders weighed the prospects of an Oman-Iran agreement on shipping through the Strait of Hormuz. Hopes for a deal were tempered by US President Donald Trump's demand that Iran pay reparations, which is likely to complicate efforts to reopen the critical waterway.
Talks between Oman and Iran are now at an advanced stage, according to Qatar's foreign ministry spokesperson. However, analysts say there is no meaningful progress yet, and signs of de-escalation or a deal would be bad news for oil prices.
The Brent crude futures contract fell 21 cents, or 0.24%, to $87.51 a barrel by 1138 GMT, while US West Texas Intermediate crude futures were down 4 cents, or 0.05%, at $82.09. The contracts had jumped more than 5% on Monday after Trump's response to Iran's conditions for a peace deal.