Hormuz Talks Send Crude Prices Soaring Amid Dollar Slump
Crude oil prices are rising as negotiations continue to reopen the Strait of Hormuz. The September WTI crude oil contract is up +0.76 (+0.98%) today, while September RBOB gasoline is up +0.0542 (+1.84%). The increase in prices is partly due to a decline in the dollar to a 7-week low.
The Strait of Hormuz has been a major source of concern for oil markets after Iran and Oman proposed a deal to partially restore shipping through the waterway. However, Iranian officials have made it clear that normalization will depend on the US lifting its blockade on Iranian ports.
A joint statement from Iran and Oman is currently under review, but Arab negotiators are concerned about Iran's ability to guarantee compliance with any agreement reached. According to the Wall Street Journal, Iran's diplomats may struggle to convince hardline officials to back a deal that does not explicitly mention Iran's role in the strait.
OPEC delegates have approved their final increase of +188,000 bpd in crude production for September, but the group plans to hold output steady for the rest of the year. This may prove challenging amid renewed US-Iran military attacks in the region and ongoing drone attacks on Russian oil infrastructure by Ukraine.