Oil Prices Soar as US-Iran Agreement Expires Without Renewal

Oil prices are volatile after the US-Iran agreement expired without renewal on August 18. The September WTI crude oil futures contract opened higher and traded in a range, hovering around $85 per barrel. This is its highest level in over two weeks.

The geopolitical risk premium associated with the Strait of Hormuz remains high due to the ongoing tensions between the US and Iran. Neither party has shown willingness to compromise, making it unlikely for prices to decrease in the short term.

TD Securities of Canada noted that the current positioning structure in the crude oil market exposes prices to significant upward squeeze risks. The institution warned that any new risk-averse sentiment or supply concerns could rapidly translate into upward pressure on key benchmark oil prices.