Iran's Hardened Stance Sends Oil Prices to Three-Week High

Oil prices surged to a three-week high on Tuesday as Iran hardened its stance in the ongoing standoff with the US. The country's chief negotiator stated that the Strait of Hormuz will remain closed until Washington meets the conditions of the June interim deal. This announcement followed a senior Iranian official's claim that the country would adopt a fully offensive military posture.

Iran denied allegations by the UAE, which claimed to have detected two ballistic missiles launched from Iran against the country. The exchange suggests that Abu Dhabi's earlier decision to halt all trade and financial dealings with Iran may be a response to direct military threats as much as a diplomatic statement.

The market has largely priced in a prolonged standoff rather than an imminent resolution, with prices supported but upside contained. Despite the escalation, physical supply remains more resilient than the rhetoric implies. Saudi Aramco resumed loadings from inside the strait, and two Chinese shipping majors began collecting cargoes from outside the Gulf chokepoint altogether.