Oil Prices Extend Gains as Strait of Hormuz Standoff Continues

Oil prices continued their upward trend for a fourth consecutive day as the standoff between Washington and Tehran over the Strait of Hormuz persists. Brent crude edged up to around $91 a barrel, while US WTI crude rose to around $85.

The conflicting signals from both sides have left shippers and insurers with little to act on, resulting in a risk premium being embedded in prices. The physical market is adjusting by routing around the uncertainty, rather than waiting for it to resolve.

Iraq's cabinet approved a mechanism to export crude via multiple outlets, starting September 1, partly to avoid the strait. Two major Chinese shipping firms have stopped sending tankers through Hormuz and Bab al-Mandeb altogether.

The temporary ceasefire agreement between the US and Iran expired on Monday, with no clear diplomatic path forward. President Trump said no talks were taking place with Iran, reiterating his position that the Strait of Hormuz remains open, directly contradicting Iran's assertion that it is shut to shipping.