Iran's Aggressive Stance Drives Oil Prices to Three-Week High

Oil prices settled at their highest level in more than three weeks on Tuesday, August 18, after Iran said it would adopt a more aggressive stance and keep the Strait of Hormuz closed. The United States ruled out extending a ceasefire, adding to concerns over supply.

The price gains were limited, with Brent crude futures finishing up 15 cents, or 0.17%, at $91.02 a barrel, while US West Texas Intermediate crude futures closed up 44 cents, or 0.52%, at $84.94 a barrel. Both contracts closed at their highest since July 24.

Darrell Fletcher, managing director of Commodities at Bannockburn Capital Markets, said the market has muted movement to daily headlines due to the amount of noise since June with no real results. He noted that covert or dark shipments slipping from the Strait of Hormuz seem to be more than the market expected.

Saudi Aramco has resumed oil loadings from inside the strait, and is offering cargoes for loading via ship-to-ship transfers off Fujairah in the UAE, according to shipping data and trade sources. Two Chinese shipping giants have also started collecting oil cargoes outside the Gulf.